Consigned to Purgatory: The Uncertain Fate of the 2016 Overtime Exemption Rule

After the failure of Roosevelt’s National Industrial Recovery Act, the Fair Labor Standards Act succeeded in bringing hourly workweek limitations, minimum wage guarantees, and overtime assurance to America’s workers. However, from its inception, several categories were exempt from these protections, and those categories have grown and changed over the years. One such category, present since the original FLSA, is the so-called “white collar” or “EAP” exemption. This provision exempts full-time salaried executive, administrative, and professional employees from the FLSA’s overtime and minimum wage provisions. These EAP exemptions have undergone numerous developments and changes in their eighty-year history, most recently with rulemaking initiated by former President Obama in 2014 and undertaken by the Department of Labor. This most recent update was supposed to take effect in December of 2016, but a Texas judge issued a nationwide injunction suspending the rule’s effective date. With the rule on hold and a new administration and Department of Labor taking the reins, the future of these “white collar” exemptions is uncertain. The new Department of Labor could leave the exemption in its pre-update 2004 form, defend the rule’s validity at the appellate court level, or undertake a new rulemaking process. Whichever course the new administration chooses will have widespread implications for workers and employers alike. This note reviews the history and development of these “white-collar” exemptions, analyzes the reasoning and purpose behind them, and discusses their future under the new administration.