Are the new regulations under the Fair Labor Standards Act really on hold?
By: Judy Herrmann
The Fair Labor Standards Act‘s new overtime rule, scheduled to take effect on December 1, 2016, would raise the minimum salary level for workers to qualify for exempt status to $47,476. In what many consider a surprise decision, Sherman, Texas U.S. District Judge Amos Mazzant, who was appointed by President Obama, granted a motion for a nationwide injunction sought by 21 states and a coalition of business groups, which halts the December 1, 2016 rollout date. Judge Mazzant explained in the November 22, 2016 ruling: “A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity.” In other words, this is not the last you’ve heard of the new regulations and their impact on employers and employees alike.
What should you do now?
Most employers have been reviewing job descriptions and salary thresholds to determine compliance with the new regulations, and your efforts may not be in vain, as the litigation regarding the new regulations will likely continue. In the interim, employers can choose to return to prior FLSA practices without concern of penalties or recourse from the DOL. If you have already communicated a salary increase to certain employees you will want to meet with your compensation team to consider the impact of this change, and how to communicate any further changes to your employees. If no widespread efforts have been made by your organization at this time, this ruling has bought you some time. Regardless of your preparation for the new regulations, it will be important for you to communicate to affected employees as we all wait to hear how the litigation plays out.