LMR-October_PROOF6

Legal Briefs
OT REGULATION OVERTURNED
BY KAREN DAY WHITE, EXECUTIVE COUNSEL
In June of 2016, this column
discussed the new U.S. Department
of Labor rule that expanded the
number of workers eligible for overtime compensation
by about 4 million persons. The rule, which was issued
on May 18, 2016, sought to significantly increase the
minimum salary level necessary for employees to be
properly classified as exempt executive, administrative,
and professional employees. The rule also provided
that the salary threshold would be automatically
adjusted periodically, so that no additional rules would
be required to adjust that level in the future.
Almost immediately, the DOL rule was challenged in
several states, including Texas. In November of 2016,
Texas U.S. District Judge Amos Mazzant issued a
nationwide injunction staying the effective date of the
rule (December 1) until resolution of the lawsuit. Nine
months later, on August 31, 2017, Judge Mazzant issued
a ruling invalidating the Obama-era regulation. The
court’s ruling centered on the rule’s overemphasis on
salary as a determinative factor in deciding whether an
employee is exempt (not entitled to overtime) or nonexempt
(entitled to overtime).
Mazzant wrote, “The department has exceeded its
authority and gone too far with the final (overtime)
rule.” Mazzant opined that nothing in the Fair Labor
Standards Act “allows the department to make salary
rather than an employee’s duties determinative of
whether a ‘bona fide executive, administrative, or
professional capacity’ employee should be exempt
from overtime pay.” Based on the same reasoning,
Mazzant also invalidated the portion of the rule that
mandated automatic increases in the overtime pay cap
every three years.
For Louisiana municipalities, this is welcome news.
As the state’s budgetary woes continue, available
local revenue and resources become more scarce;
so, implementing a massive expansion of overtime
compensation for municipal employees would have
been problematic, to say the least.
Interestingly, the court expressly gave the nod to
the Trump administration to promulgate its own
DOL rule on the matter, should it choose to do so.
There is no indication that the Trump administration
plans on appealing Mazzant’s decision, so nearly all
legal analysts agree that Obama’s DOL rule is dead.
Those same scholars also believe that the Trump
administration will adopt a new DOL rule that modestly
expands overtime eligibility through salary criteria
adjustments, while maintaining focus on the employee’s
job duties as an integral part of the analysis. We will
keep you apprised of any new overtime rules as they
are adopted.
Editor’s Note: the information provided in this column is not a
replacement for consultation with your own municipal attorney,
and it should not be considered legal advice for any particular case
or situation. You are encouraged to use the contents of this column
as a platform to have meaningful discussions with your municipal
counsel regarding possible litigation issues.
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LMR | October 2017