The most exciting football games are the ones with the surprise endings. That may very much be the case with the recent Fair Labor Standards Act (FLSA) changes.
For months now, we’ve been talking about the upcoming changes to the FLSA. With the increase to a salary minimum of $47,470 for exempt employees, many employers found themselves in a situation where they either needed to increase salaries, or move current employees to a non-exempt status and start paying them on an hourly basis with overtime. We’ve written blogs, conducted a webinar, and worked with many clients to help them comply with the new requirements.
Yesterday, a Federal Judge in Texas issued an injunction blocking the implementation of the changes scheduled for December 1st. This was a surprise play with only 10 days to go before the changes were set to take effect. The judge’s concern was that the dramatic increase in the minimum salary coupled with the automatic increases going forward were beyond the scope of the Department of Labor to change.
With the changes blocked, you are probably asking what’s next. Our prediction? As in football, a block is frequently followed by a tackle and that is a likely outcome here. The Republican Party has not been in favor of the changes to the FLSA. Since they will have control of both Congress and the Presidency in January, there is a high likelihood that this will be changed or overturned.
So what do you do if you were one of those proactive employers who took the steps to comply with the law? First, if you’ve already implemented the changes, our advice is to not undo what you’ve already done. Second, remember that salary level is only one aspect of determining exemption status. If anything, this process has shown us that, regardless of salary, a number of positions were inappropriately classified as exempt when the duties test really didn’t support it. Make certain you look at the whole duties test, not just the salary.
While the ball is still truly up in the air, this call may be the play that keeps this change from ever finding its way into the end zone.