Working Toward a Consensus: Be Prepared to Bring Yourself into Compliance with New DOL Rules

Owners/operators and practitioners in the hospitality industry who have kept up with the ongoing litigation surrounding the Department of Labor’s Final Overtime Rule ― which would have more than doubled the minimum salary threshold for the executive, administrative, and professional (“EAP”) exemptions ― now have a new development to consider. On August 30, 2017, the Judge Amos Mazzant of the Eastern District of Texas issued a Decision and Order in which it granted summary judgment in favor of the plaintiffs, a coalition of 21 states and a number of business advocacy groups who had challenged the Final Overtime Rule, and ruled that the DOL exceeded its rulemaking authority in issuing the salary level-centric Final Overtime Rule. …

As a result of Judge Mazzant’s ruling, the appeal pending  before the Fifth Circuit ― which  is currently scheduled for  oral argument on October 3, 2017 ― may now be moot. After abandoning its defense of the salary level in its reply brief on appeal, the DOL issued a Request for Information seeking input from the public on the salary level test in order to aid in its effort to formulate a new proposal to further revise the regulations governing the EAP exemptions. While it is difficult to predict what the DOL will ultimately do, the DOL will likely propose alternative modifications to the EAP exemptions, which could still include an increase to the salary level. Any increase would likely not be as dramatic as the one initially proposed. Secretary of Labor Acosta has expressed opinions that suggest he would support updating the overtime rule to some degree, possibly increasing the salary threshold to mirror inflation, to approximately $33,000 per year.

Owners/operators should continue to look for updates on the DOL’s actions with respect to the EAP exemptions and salary level test, and take steps to be prepared to bring themselves into compliance with whatever new rule the DOL issues.