Showing posts with label minimum salary level. Show all posts
Showing posts with label minimum salary level. Show all posts

Wednesday, November 23, 2016

Update: Federal court rules against Georgia but issues injunction barring implementation of Labor Department’s overtime rule

In September, I wrote that Georgia’s decision to join a 21-state lawsuit opposing the U.S. Department of Labor’s proposed overtime rule was based on its concern that making more state employees eligible for overtime would have a significant effect on Georgia’s budget.

On November 22, 2016, Federal Judge Amos Mazzant issued an injunction preventing the December 1, 2016, implementation of the rule.

Interestingly, Judge Mazzant ruled against the argument put forward by Georgia that “FLSA’s overtime requirements violate the Constitution by regulating the States and coercing them to adopt wage policy choices that adversely affect the States’ priorities, budgets, and services.”

Instead he found that the Fair Labor Standards Act did apply to states.

The judge issued the nationwide injunction after finding that the “Department exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.”

Under FLSA, employees who may be exempt from the overtime provisions of the FLSA must meet both a “duties test” to determine whether they perform duties of an executive, administrative, or professional manner, and a salary test.

In his decision, Judge Mazzant writes: “it is clear Congress intended the EAP exemption to apply to employees doing actual executive, administrative, and professional duties. In other words, Congress defined the EAP exemption with regard to duties, which does not include a minimum salary level.”

It is now up to the Labor Department to decide whether they wish to appeal the District Court’s ruling to the Fifth Circuit Court of Appeals located in New Orleans.

Complicating this matter is the upcoming change in administrations. Given the time constraints, any appeal to the Circuit Court of Appeals, and perhaps later to the Supreme Court, would have to be handled by the incoming administration; and it is unclear whether the new administration would be willing to undertake such an appeal.

In the meantime, Georgia is no longer required to reclassify state employees who would have become nonexempt under the proposed rule, and they do not have to raise their budget to cover the additional costs that might have been incurred with the rule change.