Overtime Controversy Over, For the Time Being
Last week, a federal judge declared unlawful the Obama-era Department of Labor rule that attempted to broadly redefine the class of workers eligible for overtime pay across the United States. The rule was controversial from its inception, but that controversy has, for now, come to a close. The final rule itself, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” was promulgated May 23, 2016, for the purpose of updating and specifying which U.S. workers would and would not be exempt from the federal overtime pay requirements established by the Fair Labor Standards Act of 1938 (“FLSA”). In addition to establishing overtime pay requirements, the FLSA exempts employers from paying overtime to “any employee employed in a bona fide executive, administrative, or professional capacity.” Commonly referred to as the “EAP” exemption, this provision’s specifics were left by Congress to be defined and determined by the U.S. Department of Labor. A 2004 regulation, promulgated by the Bush administration and still currently in effect, determines the class of exempt employees based on a three-part test. It classifies exempt employees as those (1) paid on a salary basis, (2) over a minimum salary level, (3) who perform executive, administrative, or professional capacity duties. The 2004 rule sets the minimum salary…