The final Fair Labor Standards Act (FLSA) overtime rule was set to take effect on Thursday, Dec. 1, 2016. As you may already know, a federal judge in Texas put the brakes on the new federal overtime rule from the Department of Labor (DOL), which would have doubled the FLSA’s salary threshold for exemption from overtime pay, and would have automatically adjusted the threshold every three years beginning in 2020.
The court’s decision on Tuesday, Nov. 22, 2016, was welcome news for many NSCA members that have been struggling with the impacts of the rule – both on their budgets and on workplace flexibility and employee morale. NSCA had joined more than 273,000 others who sent letters to try and defeat this unfair ruling.
Our primary argument (as stated in the recent webinar) was that it had no adjustments for regional cost-of-living factors.
So now what?
- At this time, employers do not need to implement changes by the Dec. 1, 2016, deadline. After hearing the full case, the court could allow the rule to go forward; the incoming Trump administration now has more time to make changes, including ending the rulemaking permanently or issuing a new rule with a more reasonable salary threshold, as NSCA and its members have advocated. We believe that this overtime ruling may be stopped altogether given the new administration’s position on the subject.
- If you have already implemented the rule, consider leaving your decisions in place. We empathize with you and other employers that have already prepared for the Dec. 1 deadline. Each workplace is unique, and employers must consider which approach causes the least disruption for their workplaces. For example, if you have not already reclassified employees, you may want to postpone your decision and monitor the policy developments closely. On the other hand, if you raised otherwise exempt employees’ salaries to meet the proposed threshold, you may want to keep those in place. Good communication is the key.
- Most importantly (and not really part of the overtime ruling), be sure to evaluate your exempt/non-exempt employee status. We’re concerned about the following positions that have been reported by many to have caused unfavorable audit results: inside sales, programmers, designers, estimators, and project managers.
As always we are here to help. If you have any questions, contact us. –Chuck Wilson, NSCA Executive Director