A recent ruling within a federal District Court in Texas removes changes to the Federal Labor Standard Act’s, or FLSA, overtime rule that were set in 2016. This rule would have effected administrative, and executive worker’s exemptions to the FLSA’s overtime requirements.
With this recent ruling, employers should look to understand the following in order to keep tabs on any additional changes regarding the FLSA’s Overtime Rule:
The Trump administration has officially ended the Obama administration’s expansion of the above federal overtime rule. The Justice Department claims that the government “overreached” when expanding the number of employees who would be covered. This law stated that businesses may exempt workers from the requirement of being paid time-and-a-half after working more than 40 hours in a week if their duties are “managerial” in nature and their income is above a certain salary threshold. The Obama administration had raised that salary threshold from $23,000 annually to $47,000 annually and would update every three years to reflect wage growth. This change would have included some four million, or more, workers would become eligible for overtime. The Justice Department’s effective repealing of this rule would help small businesses and their employees; “by doing this the Department of Labor has time to consider input from the business community to allow more workable changes to those regulations.” Explains Angelo Amador, executive director of National Restaurant Association's Restaurant Law Center. (ADP, LLC, 2017)
Though the rule is now being blocked by the District Court of Texas, all employers should continue to monitor the FLSA status of all of their employees and make sure all job duties are classified properly. “The vast majority of employers are subject to current FLSA requirements that dictate proper classification and payment methods.” (Higgins, 2017)
ADP, LLC. (2017, September 5). ADP Research Institute . Retrieved from adp.com: https://www.adp.com/tools-and-resources/adp-research-institute/insights/insight-item-detail.aspx?id=25AE8C85-CADD-457E-8C11-C66F848D1FED
Higgins, S. (2017, September 5). Washington Examiner. Retrieved from washingtonexaminer.com: http://www.washingtonexaminer.com/trump-administration-wont-save-obama-era-overtime-rule/article/2633405