Department of Labor Ends Appeal Over Salary Basis Test Giving Businesses Green Light to Continue Business as Usual

The U.S. Department of Labor (DOL) decided this week to end its appeal of a preliminary injunction issued by a federal court in Texas. That injunction had stopped implementation of the increased salary basis test regulations issued by the DOL in 2016. The DOL’s decision to end the appeal confirms the continued application of the 2004 exemption regulations to all employers. However, the DOL has issued a Request for Information seeking public comment on 11 questions related to a change in the salary basis test, which is available here. The comment period remains open through September 25, 2017 if an employer wants to provide its input.

What does this mean for business? While the ruling is of particular importance to those in regulatory and legal roles, what the DOL’s decision means for most businesses just means that business will continue with business as usual. You may recall a lot of hype surrounding changing to the Fair Labor Standards Act (FLSA) that put most businesses in panic mode last year? Well, that panic has subsided. For now, the salary basis test for overtime exemptions under the FLSA remains the same, $455 a week. This decision, however, does serve a good reminder to employees, review your exempt employees to ensure you are in compliance with the current salary test. This means, not only paying exempt employee $455 a week regardless of quality or quantity of work, but also ensuring your policies do not allow for improper wage deductions of exempt employee wages that could undermine and cause you to lose the exemption.


This blog post is published by Dickinson Wright PLLC to inform our clients and friends of important developments in the field of employment law. The content is informational only and does not constitute legal or professional advice. We encourage you to consult a Dickinson Wright attorney if you have specific questions or concerns relating to any of the topics covered in here.


About the Author: David R. Deromedi is a Member in Dickinson Wright’s Detroit office where he assists clients in all areas of labor and employment law. He has primary responsibility for all wage and hour and employee health and safety matters for firm clients and is primary counsel to Japanese employees doing business in the U.S. for employment law and employment relations issues. He can be reached at 313-223-3048 or and you can visit his bio here.