Town Hall Discussion on the FLSA December 2, 2016 The Government - - PowerPoint PPT Presentation

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Town Hall Discussion on the FLSA

December 2, 2016 The Government Law Group

Andy Phillips Chrissy Hamiel

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The Change is NOT Here

• On May 18, 2016, the U.S

. Department of Labor (“ DOL” ) announced the final rules revising the FLS A White Collar Exemption Regulations. – The revisions were to become effective December 1, 2016.

• But then…

– On November 22, 2016 – j ust 10 days prior to the regulations going into effect – a federal j udge in Texas issued a preliminary inj unction effectively imposing a nationwide prohibition on the regulations taking effect. – Note that the lawsuit was brought by 21 states. Wisconsin is a party to the case.

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What Did Judge Mazzant Do?

• The Court held that Congress intended the executive, administrative, and

professional exemption to be based on the duties performed by the employee.

• The new salary threshold effectively supplanted the duties test, thus

making salary the determinative factor for being able to claim the exemption.

• Therefore, the Court said that the DOL had exceeded its authority in this

rulemaking. – “ If Congress intended the salary requirement to supplant the duties test, then Congress, not the Department, should make the change.”

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Now What?

• The preliminary inj unction is only temporary.

– Further proceedings will occur to determine whether or not this should be permanent. – This matter will continue and, yes, it may change again.

• It is intended to allow the Court time to render a decision on the merits.
• The litigation and potential appeals could drag into the New Year, and

President-elect Trump could take action to rescind the overtime pay rule, or instruct DOL not to defend. – This rule is one of several that the incoming Trump administration has highlighted to roll back.

• Note that Congress has also taken action to delay implementation of the
• vertime pay rule.

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An Additional Twist

• Legislative Attempts to Delay Implementation

– On S eptember 28, 2016 the U.S . House of Representatives passed the Regulatory Relief for S mall Business, S chools and Nonprofits Act (H.R. 6094) by a vote of 246-177. – The bill would delay the start date of the overtime pay regulations for six months – to June 1, 2017. – The S enate has yet to schedule floor time for consideration of their companion bill, S . 3462.

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Action Items

• The U. S

. District Court's preliminary inj unction does not affect or halt any actions employers may have taken in anticipation of the Final Rule going into effect on December 1.

• Employers will need to decide how to appropriately deal with any changes

(reclassification of employees, salary increases, etc.) that were made to ensure compliance with the regulations. – Easier said, than done, right?

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Moving Forward

• Employers for now will not be required to increase salary levels to the

$47,476 amount as of yet.

• Many employers conducted a good, thorough review of the actual duties being

performed by those employees in exempt positions and corrected situations that may not have met the duties tests. – S alary aside, those corrections should remain in place. – Clerical staff is still clerical staff – t hey should not be paid on a salary basis. – There is nothing that limits DOL’ s (or private attorneys’ ) enforcement authority as it relates to existing regulations.

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Moving Forward

• Most employers will most likely simply wait and take a “ wait and see”

approach. – What is best for you may not be best for all.

• The Trump administration and the Republican Congress have signaled an
• verturning of this regulation as well as other employment regulations.
• The reality is that whether an employer decides to implement changes on

December 1 or take a “ wait and see” approach will really depend on what is best for each employer. – S

• me employers have set plans in place that fit with their budget, culture

and possible promises made. – Others may definitely need the financial relief that the inj unction may provide.

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What Do I Do While “ Waiting and S eeing” ?

• Utilize the FLS

A Playbook – Download your copy at www.vonbriesen.com/ school – Note that the Playbook still references the prior salary level of $23,360

• Considerations:

– Likely to be difficult to walk back salary increases without affecting morale.

• Especially right before the holiday season.
• Especially if that raise was substantial to move a truly exempt

employee above $47,476. – Reclassification of employees to non-exempt and imposing time tracking requirements have put employers in a flexible position to weather the possible changes.

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