As most of you will recall, in 2016, under the Obama administration, the Department of Labor ("DOL") increased the salary level required for exemption under the Fair Labor Standards Act ("FLSA") from $23,660 to $47,476. However, the Obama DOL rule was invalidated by federal courts (because the salary level was so high as to supplant the duties analysis in the FLSA exemption criteria). The final DOL rule released yesterday, increases the salary amount required for exemption under most of the FLSA exemptions -- but by substantially less than the Obama rule provided.
On August 28, 2018, the Department of Labor, Wage and Hour Division, issued six new opinion letters on issues under the Fair Labor Standards Act and Family Medical Leave Act. They are summarized below:
Thousands of employers affected by the US Department of Labor's Minimum Salary Rule for Overtime Pay Exemptions have anxiously awaited the outcome of litigation that blocks the rule from going into effect as intended, on December 1, 2016.
When a federal court in Sherman, Texas issued a nation-wide injunction on November 22nd that blocked the Department of Labor's new overtime regulation, thousands of employers across the country breathed a sigh of relief. The DOL's new rule was to have gone into effect on December 1st and would have more than doubled the minimum salary employers would have to pay employees to qualify them for "white collar" exemptions from the FLSA's overtime and minimum wage requirements. Specifically, the new regulation, issued in May, gave employers just 6 months to either meet a new minimum salary of $47,476, annualized, or $913 per week. Employers unable or unwilling to meet this new salary for executive, administrative, or professional employees, would have had to reclassify them to non-exempt status, track all time worked, and pay overtime for all hours worked over 40 in a work week. Because the trial court's injunction came just days before the new rule was to take effect, many employers had plans in place and some had already communicated, or actually implemented, drastic changes to their pay practices to comply with the DOL's mandate. As a result, these employers still face tough decisions either to stick with or rescind changes already made or communicated to their workforces. To make matters worse, on December 1st (the day its new salary regulation was to have begun) the DOL filed an appeal to overturn the trial judge's order. If successful, the appeal would reverse the injunction and allow the DOL's overtime salary regulation to go into effect at some unknown date.
A federal judge in Sherman, Texas has issued a preliminary injunction which operates nation-wide to bar the Department of Labor's minimum salary rule for certain white collar exemptions from going into effect. Employers have been bracing for drastic changes to their pay practices and exempt/non-exempt job classifications due to a DOL regulation finalized this summer and set to take effect December 1, 2016. This rule more than doubled the minimum salary required to claim certain exemptions from overtime pay. The court's decision to block the rule, issued on November 22nd, came not a moment too soon for thousands of employers facing tough decisions before the rule was to take effect next Thursday.
As every Employer is aware, there has been a flurry of activity to forestall the implementation of the United States Department of Labor's new Fair Labor Standards Act White-Collar Exemption Regulations that were scheduled to take effect on Thursday, December 1, 2016. There have been two (2) separate Lawsuits filed in the Texas Federal Courts seeking to block these Regulations. As the date of this article, the Court has withheld Temporary Injunction status, so the chances of the December 1, 2016 date being forestalled because of Court action is fairly nonexistent.