The Heightened Salary Basis Requirement Is Finally Dead! (At Least In The Trial Court)

September 8, 2017

Last week, the U.S. District Court for the Eastern District of Texas (Judge Mazzant) delivered the death blow to the heightened salary basis requirement adopted by the DOL under the Obama Administration. Everyone will recall those regulations would have doubled the required minimum salary (from $23,660/year to $47,476/year) for white collar exempt employees. Just before the regulations went into effect Judge Mazzant enjoined them with a restraining order, concluding the plaintiffs would likely prevail in proving that the heightened salary basis requirement was invalid.

 

Although that injunction has been on appeal, the trial court proceedings were not stayed. Thus, Judge Mazzant proceeded forward and decided the case on the merits. Not surprisingly, he has concluded that the heightened salary basis requirement (more than double what it was before) was so steep as to unlawfully exceed the DOL’s authority to “define and delimit” the white collar exemptions. Judge Mazzant found that the salary basis increase effectively supplanted Congressional intent that the exemptions be based upon workers’ duties.

 

So what’s next? The DOL already stated (in its appeal of the initial restraining order) that it no longer sought to defend the doubled salary basis requirement, but that it simply sought to defend its ability to include any minimum salary basis requirement as part of the white collar exemptions. The DOL may feel the need to appeal Judge Mazzant’s latest ruling in order to obtain a clear appellate determination supporting inclusion of any minimum salary basis requirement as part of the white collar exemptions.

 

In the meantime, the DOL has also sought public comment where it proposes several alternatives for comment, including a lower minimum salary basis in the range of $30,000 to $35,000 (see Request for Information; Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees).

 

Needless to say, employers and employment lawyers will need to keep monitoring how these events continue to unfold. In the meantime, everyone should avail themselves of the opportunity to submit comments to the DOL on its new salary basis proposals. Comments are due on or before September 25, 2017.

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