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Court finishes job of invalidating Obama Labor Department’s overtime rule

Sources: National Ready Mixed Concrete Association, Silver Spring, Md.; Associated Builders & Contractors, Washington, D.C.; CP staff

The U.S. District Court for the Eastern District of Texas has issued a permanent injunction of an Obama Administration-revised overtime pay rule, capping a preliminary injunction it issued late last year. The May 2016 rule attempted to change federal exemptions for overtime pay under the Fair Labor Standards Act by doubling the white-collar worker minimum salary level exemption from $23,660 to $47,475 annually.

It also called for the U.S. Department of Labor to a) increase the highly-compensated employee threshold from $100,000 to $134,004; b) update every three years the salary threshold for exemption (tied to the 40th percentile of full-time salaried workers in the country’s lowest income region); c) amend the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10 percent of the new standard salary level; and, d) maintain the "duties test" for executive, administrative and professional employees.

NRMCA Government Affairs staff credits the court actions to pro-business interests with which the association is closely aligned, and calls the overtime rule invalidation “a huge win for the industry.” Staff is tracking a new rule—one more closely aligned with pro-business ideals—in the works at the Labor Department.