The Old Salary Thresholds for OT Exemptions Still Apply

This is what we Thought Would Happen to Certain Minimum Salary Rules:

 

During 2015-16, the US Department of Labor (DOL) made some changes to the Fair Labor Standards Act (FLSA) Salary Tests.

 

The then-current minimum salaries for employees who are exempt from overtime under the FLSA’s Salary Basis and Highly Compensated Employee tests were $23,600.00 and $100,000.00, respectively.

 

The new regulations raised those salaries to $50,440.00 and $122,148.00. These figures were also indexed for inflation.

 

Here’s what Did Happen:

 

Employer groups and the Attorneys General of several states filed lawsuits in the Federal Court for eastern Texas. The suits challenged the DOL’s authority to make the changes. The Obama Administration defended the suits.

 

The judge overseeing the case granted an injunction before the rules could go into effect.  Many employers across the country had already implemented the new salary thresholds. Some had also made changes to their mix of exempt and non-exempt employees in order to lessen the impact of the salary increases.

 

Following the 2016 election, the Trump Administration announced it would stop defending the suits.  The DOL also withdrew the proposed changes and stated it would begin a new round of rule-making concerning the Salary Tests.

 

Late last week, the judge issued a final ruling that the DOL’s 2015-16 changes were invalid.  The consensus of opinion among employment law specialists is that those specific salary figures won’t ever take effect.

 

Now What?

 

Q: What does this mean for employers?

 

A: The Salary Basis and Highly Compensated Employee minimum salaries of $23,600.00 and $100,000.00 will remain in effect until further notice.

 

Q: What should employers do if they had already increased their salaries or had changed their mix of exempt and non-exempt employees?

 

A: That situation deserves a strategic evaluation by the executive team of each affected employer.

 

Give us a call.  We’ve been involved in a lot of those evaluations.

 

Thank you!

 

Stuart Blake

Mobile – (949) 842-9379

sblake@innovacounsel.com

 

Michael Oswald

Mobile – 208.914.3086

moswald@innovacounsel.com

 

www.innovacounsel.com

 

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