Federal Court Issues Death Knell for Department of Labor's White Collar Rules

Federal Court Issues Death Knell for Department of Labor's White Collar Rules

On August 31, 2017, in a bellwether ruling, the Federal District Court in the Eastern District of Texas granted summary judgment in favor of 21 states and over 50 business groups, and invalidated the Department of Labor’s pending “white collar” regulations.

The Department of Labor’s “white collar” regulations were finalized in May 2016 and were scheduled to go into effect on December 1, 2016. Those regulations would have raised the salary threshold for exempt employees from $23,660 per year to $47,476 per year. However, on November 22, 2016, the Federal District Court in the Eastern District of Texas temporarily enjoined the regulations from going into effect.

The Federal District Court in the Eastern District of Texas’ recent ruling has brought a degree of closure to this matter. Under the Court’s ruling, the proposed rules are null and void. In reaching its conclusion, the Court determined the Department of Labor exceeded its authority when it set the salary threshold at $47,476 per year. Therefore, the proposed rules are invalid and the previous and long-standing salary threshold of $23,660 per year is still in effect.

The Department of Labor has sixty days to appeal this ruling; however, it is not likely to do so. We will keep you informed if there are any further developments on this matter. If you wish to discuss employee exemptions or any other labor and employment matter, please contact one of our Labor and Employment attorneys: Tom Ryan, Esq. (tryan@lcrlaw.com); Ursula Leo, Esq. (uleo@lcrlaw.com); Jessica Jansyn, Esq. (jjansyn@lcrlaw.com); or Michael Darbee, Esq. (mdarbee@lcrlaw.com). Our attorneys can also be reached by phone at (973) 729-1880.