Texas judge opens door for more realistic Fair Labor Standards Act rule for exempt employees’ salaries

U.S. District Court Judge Amos Mazzant  of the Eastern District of Texas last week struck down the U.S. Department of Labor’s decision in 2016 to more than double the minimum salary requirements for employees exempt from overtime rules, giving the Labor Department a new opportunity to create a more realistic rule.

Mazzant said the Labor Department overstepped its bounds with the dramatic increase in minimum salary requirements. Congress, he said, laid out the rule that administrative, executive and professional employees (AEP employees) would be exempt from the overtime requirements. With the 2016 threshold change, he said, the Labor Department effectively invalidated the meaning of these three types of job descriptions. Many workers performing duties consistent with the AEP descriptions would have lost their exempt status.

The judge had already put the new rule on hold in November 2016 before it went into effect. Trump administration appointee Alexander Acosta, the new Secretary of Labor, said last spring that he intended to revisit the new rule. Labor could choose to appeal Mazzant’s decision, but it is unlikely that the salary requirement will ever go into effect.

The requirement caught many community newspaper publishers by surprise. A recent National Newspaper Association survey on the industry’s response to the rule indicated that few newspapers intended to budget for more overtime, most citing a lack of resources. Instead, most intended to cut back on news coverage, but were concerned about being unable to properly cover their communities.

NNA President Matthew Paxton IV said the Mazzant decision would buy employers and employee groups some time to find a better standard.

“NNA met with the Obama Administration last year and agreed that the salary threshold was due for an increase. But by ratcheting it up so high, the Labor Department had pretty much guaranteed most employees would not see a fatter paycheck, but rather were in danger of layoffs or simply being handcuffed in their abilities to chase the stories they wanted to cover. Overall, the industry is in no position to meet the 2016 standard. Now we can all work on finding something that actually works,” Paxton said.

Acosta is accepting comments on the standard through September 25. NNA will file comments on behalf of community newspapers.

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