District Court Trumps Appeals Court on Obama Overtime Rule

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A month before the U.S. 5th Circuit Court of Appeals was to consider the preliminary injunction against the Obama-era overtime rule raising the salary threshold for exemption to $47,417 a year, the Texas District Court that issued the preliminary injunction against the rule made it permanent. This means the process must start all over again, with a new appeal filed by the Trump administration if it wants to challenge the new ruling.

Judge Amos Mazzant on Aug. 31 made his November 2016 preliminary injunction permanent by declaring that the Obama salary threshold increase would essentially make an employee’s duties, functions or tasks irrelevant if the employee’s salary falls below the new minimum salary level.”

Judge Mazzant also noted that while the Department of Labor (DOL) is permitted to establish a salary level to create a “floor” to assist in determining whether an employee qualified as a “bona fide” exempt employee, “the Department does not have the authority to use a salary-level test that will effectively eliminate the duties test.” Consequently, the court ruled the Final Rule to be invalid and permanently enjoined its implementation.
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