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Obama Rule on Overtime Pay Is Challenged in Court
DOL Wants to Lower Threshold and Have Its Ability to Do So Reaffirmed


A recent district court judgment found that the Fair Labor Standards Act does not give the Department of Labor the authority to include a salary-level test, when determining who is eligible for overtime pay, to help identify workers who are "employed in a bona fide executive, administrative, or professional capacity."

Historically, the U.S. Department of Labor has used a three-part test to identify workers who in an executive, administrative or professional position are not eligible for overtime pay. This test defined those three components as being paid on a salary basis, earning a specified salary level, and satisfying a duties test.

But in an earlier district court ruling, the salary level part of the test was deemed to be unlawful. In a brief recently filed in the United States Court of Appeals for the Fifth Circuit, lawyers for the Department of Labor asked it to reverse that ruling as the department plans to revise the level set by the Obama administration.

The Trump administration feels that the new minimum threshold to pass that part of the test is too high. Up until 2016, any worker that met the other two test components and made over $23,500 a year was ineligible for overtime. The new minimum threshold was doubled to $47,000 per year, which was expected to make around 4 million additional workers eligible for time-and-a-half pay after 40 hours worked per week.

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May 23, 2019, 4:42 am PDT

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