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USDOL appeals court decision on salary wage exemption

The US Department of Labor is appealing a federal judge’s decision, which blocked the federal agency’s final rule that was to go into effect yesterday, raising the exemption for salaried workers throughout the United States and American Samoa.

The “special salary level” for salaried workers — who are considered exempt ‘white collar’ employees in American Samoa, was to increase from $380 per week — the current standard — to $767 per week on Dec. 1, 2016.  For the US, the salary exemption hikes from the current $455 per week ($23,660 annually) to $921 per week (or $47,892 annually).

But last week Tuesday, U.S. District Court Judge Amos Mazzant of Texas granted an Emergency Motion for Preliminary Injunction and enjoined the USDOL from implementing and enforcing final rule, which he declared as “unlawful” and concluded that USDOL “exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.”

However, USDOL said that the rule updated the standard salary level and provided a method to keep the salary level current to better effectuate Congress's intent to exempt bona fide white-collar workers from overtime protections.

Yesterday, the US Justice Department, on behalf of USDOL filed a notice to appeal the preliminary injunction to the U.S. Circuit Court of Appeals for the Fifth Circuit, according to a brief statement from USDOL. It also says that since 1940 USDOL regulations have generally required three tests must be met for the exempted salary workers. Additionally, USDOL has updated the salary level requirements seven times since 1938.

“The Department strongly disagrees with the decision by the [Texas federal] court. The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule,” the statement said.

The court filing outlining arguments for appealing the lower court’s decision should be made soon and national news organizations are reporting that it could take several months before the appellate court reaches a final decision.

A few local businesses have inquired with Samoa News on the status of this final rule as well as the federal lawsuit, which was initiated by the state of Nevada and later joined by governors of some states along with business organizations. At this point, the salary exemption is on hold, while the legal wrangling continues at the federal level.

USDOL said it is updating developments on this case online: