You may have heard the news from 11/23 that a Texas Judge entered a TEMPORARY injunction blocking the new Fair Labor Standards Act (FLSA) overtime rule that was to become effective 12/1/16. This is not the final word: They will have to prove they will win at trial to have a permanent junction to permanently block the Act. Yet, the Trump Administration could take steps to change the law later if a permanent junction does not enter.
Keep in mind the primary change to the law was increasing the salary test for exempt status from $23,660 to $47,476 per year. An employer must meet BOTH the “salary test” AND the “duties test” for each employee to properly be classified as exempt. If any staff member meets both tests, for now, the salary test remains at $23,660 and does NOT increase to $47,476. BUT, for each employee to be properly classified as “exempt” they must also meet the duties test, typically meeting the executive, administrative, professional duties tests (or a couple of others likely not applicable to you). If any employee does NOT meet one of the duties tests, they still are not legally “exempt” and that doesn’t change.
Please contact me for questions and clarification. If you’ve already taken steps to increase wages to $47,476 or changed status from exempt to non-exempt, the best practice is to keep it there while this gets sorted out.
Stay tuned for further information on our blog at ShollerEdwards.com.