So then this happened today …. a federal judge in Eastern Texas put a halt to the FLSA regulation updates. Well … maybe … I know you have been working diligently on updating your approach to the FLSA compliance. The announcement in May 2016 by the federal Department of Labor told us that we would need to look a position’s exemption based on a new wage rule. The current wage rule is $455 per week in gross earnings and December 1, 2016 the gross wage increases to $913 per week. As you well know that means many more employees in your workforce are subject to overtime earnings since chances are their pay may not meet the earnings requirement, even if their job duties meet the exemption criteria under the FLSA’s guidelines.
This summer the US Chamber of Commerce as well as 21 states filed motions to have the FLSA revisions revoked or delayed pending further review. Nothing really came about those motions until today (November 22nd) when a federal judge in Texas said – Let’s take a minute to review. The claim is that the jump in gross wages is considerably unfair for employers and the DOL overstepped its legal bounds with the increase in gross wages as well as the automatic increase in the wage standard every 3 years (another often overlooked part of the law’s revisions).
So what should you do?
If you don’t have a plan for complying with the new law – this “pause” doesn’t let you off the hook. You need a plan for compliance and you need to get that done quickly.
If you have your plan to implement the FLSA adjustment by December 1, 2016 keep your plan outline – but you may want to hold off on full implementation. The reason for my caution in full implementation is in this one regard – pay increases. If your plan for compliance includes increasing base pay to meet the new gross weekly wage threshold I don’t want you to grant the increase only to find out you didn’t need to add that cost to your business. Furthermore it would be an employee relations nightmare to take pay back from employees.
More to come on this topic for sure! So keep your eyes peeled for news stories on this topic and I’ll keep you up to date as more information comes around. Feel free to contact me with any questions!
Read more here via Society for Human Resource Management (SHRM): http://stfi.re/xzxbgbr
And here via National Law Review: http://stfi.re/kznrkkb