This article was sourced from hrdive.com

Friday’s notice of appeal may come as a surprise to employers who expected the Trump administration to abandon the final rule; attorneys who previously spoke to HR Dive said that the rule was effectively “dead” despite DOL’s State of Texas appeal because of the Trump administration’s conservative policy stance on overtime.

In fact, the new administration had already filed motions in the 5th Circuit pertinent to overtime rule litigation. On Jan. 22, two days after President Donald Trump’s inauguration, DOJ attorneys sent a letter to the 5th Circuit requesting a 30-day extension on the deadline set by the court to file an opening brief in the State of Texas appeal. The court granted the request and the agency’s filing deadline is currently set to March 7.

The April 2024 final rule proposed a two-step process that would have eventually raised the minimum annual salary threshold for overtime pay eligibility under the FLSA from $35,568 to $58,656 by Jan. 1, 2025. The rule would then have implemented a mechanism for automatically adjusting the threshold every three years using current wage data beginning in July 2027.

But a series of Texas court decisions froze the rule. The judge in State of Texas held that the rule exceeded DOL’s authority and was unlawful. Likewise, Cummings said in his decision that he found the State of Texas judge’s reasoning “persuasive,” and he adopted the same reasoning in ruling for the plaintiffs.

There is some intrigue in how the 5th Circuit might rule on the two appealed judgments given that the court signed off on DOL’s overall use of a salary basis test for determining overtime pay eligibility in last year’s Mayfield v. U.S. Department of Labor. The Mayfield plaintiffs alleged that the salary basis test had no basis in the FLSA’s text, but the 5th Circuit disagreed. The court did hold, however, that DOL “cannot enact rules that replace or swallow the meaning” of the FLSA’s text, adding that particular salary threshold may raise legal issues because of their size.

This information is not meant to be legal advice and is for consultative purposes only. Please contact Valerie Bruce Hovland, Salus Group’s V.P. of Compliance at [email protected] if you need additional information.