In what will be a relief to many community college officials, a federal judge in the Eastern District Court of Texas on Friday ruled to strike down the Biden administration’s Fair Labor Standards Act (FLSA) overtime final rule.
The ruling nullified the entire rule, including last July’s new overtime floor of $43,888 (annually) and the looming January 1 increase to $58,656. In addition, the regulation’s planned increases for every three years have also been set aside. The decision applies to all covered employers and employees throughout the nation.
The American Association of Community Colleges (AACC) had filed comments on the Biden administration’s proposed rule, emphasizing the severe negative financial impact that it would have on many institutions. The final rule lowered the salary floor for exemptions from the proposed level, but it nevertheless would have had substantial repercussions throughout the country.
Once the rule was finalized, AACC worked with member campuses and state offices before it was implemented because it did have differential impacts depending on various state and local circumstances, and the rule was complied with in a several ways. The pending January 1 increase was much larger than the one that took effect July 1, leading to greater concerns on campuses, with the added uncertainty of whether the pending legal actions would be successful.
Campuses can now revert to the previous overtime threshold of $35,658 per year placed during Donald Trump’s first administration, which is almost $21,000 less than what would have taken effect under Biden’s rule.
Legal challenges from the get-go
Shortly after Biden’s proposed rule to alter overtime standards was published, several lawsuits were filed challenging it, as had been done by an overtime rule advanced by the Obama administration. AACC was not party to these suits, which argued in part that the salary threshold that was supposed to go into effect on January 1, 2025, was so high it would result in more than 4 million individuals being denied exempt status, even though these individuals could reasonably be classified as exempt based on their duties. It was therefore asserted that the rule violated both the statutory language of the FLSA and prior court decisions.
The Eastern District Court of Texas granted a preliminary injunction for public employers in Texas prior to the July 1 effective date, stopping the rule from taking effect for this set of employees only.
President-elect Trump’s incoming administration will now be in a position to alter the current overtime regulations. It is virtually certain that the next president will not attempt to appeal the decision just rendered and reinstate the Biden policy.
