Overtime Law Update

By now you know that a federal court ruling has temporarily put the federal Department of Labor (DOL)’s Fair Labor Standards Act (FLSA) rules on hold.

These rules raise the minimum salary threshold required to qualify for exempt status to $47,476 per year, or $913 per week, essentially doubling the minimum salary threshold.  This ruling would have changed the payroll landscape for many employers and employees.

The rules were set to take effect on December 1, 2016, and many employers had made changes in anticipation of the new regulations.  A number of states believe the DOL exceeded its legislative authority in promulgating the regulations and sued to block the new rules.  Speculation is that President-elect Donald Trump’s DOL will not support them.

What does the court ruling mean?

The federal court issued a preliminary injunction, which effectively preserves the status quo until the court can resolve the issues the states’ lawsuits raised.  According to the court, putting the new rule on hold until the court sorts through the issues raised would be less harmful than letting the new regulation to go into effect and then potentially reversing it.

Although the current DOL reports that it will fight the litigation, the President-elect may reverse the regulations and/or instruct the DOL to stop fighting the lawsuit.  Alternatively, the new Congress could attempt to revoke the rules with legislation.

What actions should employers take?

Employers don’t have to raise their minimum exemption salary thresholds until the court rules in favor of the proposed rule – which it may not do.  Employers who want to make the changes outlined by the DOL’s proposed rule can if they wish, but the old rules still apply.

If, as an employer you have already made the adjustments, revoking or postponing the planned changes have pros and cons.

 

Dr. Lynne Curry is author of ”Beating the Workplace Bully” and ”Solutions” as well as owner of the management/HR consulting/training firm The Growth Company Inc. Follow her on Twitter @lynnecury10 or at www.bullywhisperer.com

Richard Birdsall, J.D. is a Senior Associate at The Growth Company, Inc. You can follow him on LinkedIn and Twitter.

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