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FLSA Changes—DOL considers appeal as Trump prepares to take office

11/30/2016 | Category: Employment Law-Wage and Hour
As per my previous article:
  • A federal court has decided that the new Department of Labor (DOL) FLSA overtime rule that was set to raise the minimum salary for salary exempt workers on December 1, 2016, will NOT go into effect as planned.  
  • To be exempt from overtime, the regulations require an employee to (1) have EAP duties; (2) be paid on a salary basis; and (3) meet a minimum salary level.
  • The Final Rule raises the salary level from $455 per week ($23,660 annually) to $913 per week ($47,476 annually)
  • The court found that the DOL cannot base the exemptions on salary alone, but this significant increase to the salary level creates essentially a de facto salary-only test.
  • The Court found that its injunction applies nationwide preventing the DOL from enforcing the rule in all the states, including Ohio.  
The question next becomes:  So what now?  The DOL has said that it is considering an appeal.  However, with President Elect Trump preparing to take office, he is likely to appoint a much more business friendly Secretary of Labor.  Thus, it is unlikely that the DOL, under the Trump administration, would pursue an appeal or attempt to revive the changes. 

With that said, employers should continue to look for new developments, and, in the meantime, can rely on existing rules.  Employers may find it difficult to reverse some changes they may have already made, i.e. presenting raises to employees.  Employers, however, may consider postponing changes that have not been made.  Each employer should evaluate the financial and good will costs of rolling back salary increases made in order to comply with DOL’s enjoined rule or keeping them in place. Also, employers must consider whether to return workers to salaried pay if they have already made the change to hourly.  Should you have any questions regarding the court’s decision or the changes, please feel free to contact Ryan Neumeyer or Lynn Schonberg at 216-447-1551.   

Ross, Brittain & Schonberg Co., L.P.A.

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