Biden overtime rule clears first hurdle, challenges remain

The increasingly complicated legal battle over the Fair Labor Standards Act’s (FLSA) overtime rule—and the way it defines the exemptions for executive, administrative, professional, outside sales, and computer employees—took another dizzying turn. Much of the complication arises because there are two rules and two cases running on parallel tracks.

The first case involves a Trump-era overtime regulation that was challenged when it was issued. Among the many procedural conflicts in the case, there was a significant legal issue about whether the Department of Labor (DOL) could consider salary level at all when determining who qualifies for overtime. This question was given potency by a comment by Justice Brett Kavanaugh in his Helix Energy dissent last term, noting that salary wasn’t even mentioned in the FLSA overtime provision.

Salary-basis test upheld

The staunchly conservative U.S. 5th Circuit Court of Appeals upheld the U.S. Department of Labor’s (DOL) authority to use a worker’s salary level to determine whether they should be exempt from federal overtime pay requirements. The fundamental principle at issue was whether the FLSA clearly authorized the DOL to set a salary basis for overtime eligibility.