By Tammy McCutchen
In May 2016, the Obama Administration issued a final rule more than doubling the minimum salary level required for the FLSA “white collar” exemptions from $455 per week ($23,660 annualized) to $913 per week ($47,476 annualized). However, just nine days before the rule was scheduled to go into effect on December 1, 2016, a federal district court in Texas issued a preliminary injunction of the rule after finding that setting a salary level so high was contrary to Congressional intent by excluding millions of executive, administrative and professional employees regardless of duties. DOL immediately appealed the preliminary injunction to the U.S. Court of Appeals for the Fifth Circuit, asking and receiving expedited review.
But since then, all went quite on the overtime front – until recently.
After inauguration, DOL asked and received several extensions of time to file its reply brief in the Fifth Circuit, but that brief has now been filed. DOL has asked the appellate court to reaffirm its authority to set a minimum salary level, but not to rule on whether $913 is too high. Instead, DOL has issued a Request for Information (RFI), requesting comments from the public on the implementation and impact of $913 rule. DOL is also seeking comments on where it should set the minimum salary level. The agency will use the comments it received to propose a new salary level (expected to be lower but certainly not higher) in a Notice of Proposed Rulemaking later this year.
Some key dates: Comments on the RFI are due to DOL by September 25th. You can review the RFI and file comments here. A union-led letter writing campaign already has netted almost 115,000 comments requesting DOL to maintain the $913 weekly salary requirement. Oral arguments on the preliminary injunction are scheduled before the Fifth Circuit on October 2nd, and a decision could come by the end of the year. DOL has not requested a stay of their appeal.
What happens, then, if the Fifth Circuit reverses the preliminary injunction before DOL is able to issue a replacement final rule with a lower salary level? Since the effective date of the 2016 final rule was December 1, 2016, if the Fifth Circuit reverses the preliminary injunction before DOL extends the effective date or replaces the rule, employees will have to comply by increasing salaries or reclassifying exempt employees with salaries below $913 per week ($47,476).
What should you do now? File comments on the RFI, closely track developments, and brush off and update those plans you made last year to reclassify and as you update your plans, Navigator OT can make the job easier.
Simply complete the easy-to-use online questionnaire that applies all applicable federal and state tests while unlocking the unprecedented and proprietary engine of over 2,000 reported court decisions and DOL opinion letters – distilled, dissected, weighted and tested by the nation’s leading wage-hour experts
Your result – a clear, actionable risk assessment pegging the strength of each applicable exemption, delivered with expertly reasoned suggestions on how to lower the risk of misclassification. Together with the risk result, Navigator OT solutions provide a summary of the federal and state exemption standards and a transcript of answers to the online questionnaire.
Navigator OT contains overtime solutions under both the current and would-be “new rules”. Both solutions apply identical logic and operate from the same knowledge database as it relates to the “duties test”.
Navigator OT Pre-2016 – applies the current minimum salary requirements currently in effect now and until further notice.
Navigator OT 2016 Regs – delivers its results under the minimum salary requirements previously scheduled to take effect December 1, 2016.
If you want to learn more about Navigator OT, reach out to Cara Freling at freling@compliancehr.com.
