DOL Final Overtime Rule Was Overruled

As many of you recall, late last year employers’ were frantic with the pending federal overtime rule which would have also affected California employers. The rule, once in effect, would have doubled the minimum salary for exempt employees who followed the Fair Labor Standards Act. In California, it would have increased exempt employee salaries by at least $4,000.00.  In late November, just days before the rule took effect, a Texas judge issued a preliminary injunction on the rule in order to investigate whether the DOL overstepped its authority by issuing the rule.  Yesterday, in a final decision, the Texas judge ruled that the previous administration did overstep its authority and the Court struck down the rule. The rationale of the ruling was that the salary was so high it would effectively invalidate the two-prong test by categorically excluding all employees who meet the duties but not the salary threshold.