Posted on September 7, 2017

Last week, the federal district court in Texas issued a final order striking down the modified overtime rule proposed by the Obama administration, which would have raised the salary level for exemption from overtime from $455 per week to $913 per week. The court held that the Department of Labor (DOL) is allowed to include both a salary and duties test to determine eligibility for overtime, but the amount of salary proposed by the Obama Administration’s DOL was too high. Prior to the ruling, the proposed change to the overtime rule had been “on hold’ based on a preliminary injunction issued by the same court on November 22, 2016.

What does this mean for nonprofit and other employers? While an appeal of the original preliminary injunction issued in November of 2016 is still pending, it is unlikely that the appeal will move forward after this decision. The DOL has already called for public comment to assist it in proposing a new overtime rule, and will now likely move forward with the administrative process required to develop and propose a different modification to the overtime rule. For now, the rule prior to the Obama Administration’s proposal, including both a duties test and the requirement of a salary in excess of $455 per week for most exemptions from overtime, remains in effect.

Please contact your Pro Bono Partnership of Atlanta attorney if you have any questions.