September, 2017

FLSA Overtime Changes Dismissed by Federal Judge

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FLSA Overtime Rule Dismissed by Federal Judge

There is finally a resolution to the ongoing “will they or won’t they” of the FLSA overtime rule changes. On August 31, 2017, a Texas federal judge ruled the Department of Labor’s (DOL’s) new FLSA overtime rule as invalid. The proposal, which was supposed to go into effect on December 1, 2016, would have required employers to raise the minimum salary for employees to qualify for “white collar” exemptions.

The current annual salary limit employers are required to allow overtime to is $23,660, and the new FLSA rule would have required the minimum salary to be $47,476. The proposed overtime rule would have affected over 4 million workers and employers nationwide. It was first blocked by Judge Mazzant on November 22, 2016, on the grounds that the DOL had overstepped its position, and should have been considering job duties over salary for eligibility.

What’s Happening Now

On September 5, 2017, the Justice Department requested the federal appeals court to dismiss the DOL’s appeal of the overtime rule, effectively ending the ongoing debate over the last ten months. The DOL has responded by dropping their appeal.

Back in July, the DOL issued a request for information (RFI) from employers for feedback. The RFI is wanting comments back on 11 questions regarding what criteria for overtime rules should be considered in the future; written suggestions on what the new overtime rule should be are due to the DOL by September 25, 2017.

Labor Secretary Alexander Acosta has implied that the DOL may propose a new rule with a moderate salary threshold bump based on feedback from the RFI. The U.S. Court of Appeals for the Fifth Circuit has been asked by the Justice Department to state the DOL’s authority to look at employee’s salary when determining criteria for overtime calculation.

What This Means for Employers

For employers, nothing will change in the immediate future. But employers should continue to update the job descriptions of employees and make sure that all job descriptions for executive, administrative, and professional employees are in compliance with current overtime exemptions based on current duties tests. Employers should also keep up to date on all news regarding the FLSA and the DOL, as a Notice of Proposed Rulemaking for a new salary level is expected to be announced within the next few months.

How APS can help

The proposed FLSA overtime rule was a wake-up call for many employers in regards to their business processes. APS can help ensure your employees are properly classified with our intuitive HCM dashboards and analytics so you are always compliant. Learn more today by scheduling a free demo of our system.

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