Impending FLSA Regulations are On-Hold

In a blog I posted on June 25, 2016, “Time to Start Preparing for The New Overtime Regulations”, I discussed what was slated to become a major change to the Fair Labor Standards Act (FLSA) on December 1, 2016.  Well, not so fast.  Last month, a federal judge in Texas issued a Court Order blocking the implementation of the new regulations which would have increased the minimum salary to $47,476 annually for an employee to qualify for the executive, administrative or professional exemptions (the so called “white collar exemptions”).   While employee-rights groups celebrated the new regulations, many business groups felt that the new regulations put extra financial pressures on businesses that were already having difficulty surviving in the current economy and that the Department of Labor had overstepped its authority with the new regulations.  Thus, lawsuits were filed which culminated in the federal judge’s decision, which applies nationwide, and basically keeps everything status quo for the time being and employers do not have to make changes by December 1, 2016.

However, while I was presenting seminars on this topic during the past few months, I discovered that many employers are still misclassifying their employees and, as a result, may be failing to pay required overtime.  Many employers simply believe that they can pay their employees a non-fluctuating salary, and somehow they are magically in compliance with the FLSA.  This is not the case.  An employee’s job duties dictate if he/she is entitled to overtime.  The fact that the federal judge has stayed the impending regulations, does alter the basic rule that employees whose job duties do not qualify for an exception under the FLSA must be paid overtime.

For more information on the classification of employees under the Fair Labor Standards Act, please contact Scott A. Mirsky at (301) 664-7710 or samirsky@mirskylawgroup.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Time to Start Preparing for The New Overtime Regulations

**SEE UPDATED BLOG POSTED DECEMBER 2016**

Starting on December 1, 2016, the minimum salary level to qualify for the executive, administrative or professional exemptions (the so called “white collar exemptions”) under the Fair Labor Standards Act (“FLSA”) will increase to $47,476 annually.  This is a big jump from the previous minimum salary level of $23,000 annually.  Put in simple terms, white-collar employees making less than $47,476 will not meet the test for the “white collar exemption” and the employee will be eligible for overtime pay if they work over 40 hours in a given week.

What should employers do to prepare?

Make a list of all employees (and their salaries) who are currently exempt under the “white collar exemptions.”  If they are paid $47,476 or more then no change is warranted (assuming they meet the duties test of the “white collar exemptions” which are not changing under the new regulations).  On the other hand, if the employee makes less than $47,476 they will be entitled to overtime under the new regulations.  Employers have a few options to handle this situation.

  • Raise the employee’s salary to $47,476 or higher;
  • Do not increase the employee’s salary but make sure the employee does not work more than 40 hours in a given week; or
  • Do not increase the employee’s salary and pay the 1.5 overtime premium for all hours worked over 40 hours in a given week.

This decision should not be made until after considering the financial impact of each option and after thorough discussion with a competent employment law attorney.  The author of this blog post, Scott A, Mirsky, Esquire, assists businesses deal with complicated employment issues and employment litigation.   He can be reached at (301) 664-7710 or samirsky@mirskylawgroup.com.

 

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.