*UPDATE: As of March 1st, 2017 the new overtime rule is still being sorted out. Once this decision is finalized we will have an update for you on the details.
In an important development for employers nationwide, on Tuesday, November 22, 2016, a U.S. district court in Texas issued a preliminary injunction blocking implementation of the Department of Labor’s (DOL) new salary test for determining eligibility for overtime under the Fair Labor Standards Act (FLSA).
The FLSA Rules Are Still Currently Being Sorted Out.
The rule, which had been slated to take effect on December 1, 2016, would more than double the minimum annual salary required for the “white collar exceptions” from $23,660 to $47,476 and create an index for future increases. In response to the district court decision, the DOL said that they “are” currently considering all of our legal operations.”
The Rule Will NOT Take Effect on December 1st, 2016
As a result of the preliminary injunction, the DOL rule will not take effect on December 1, and its future is in doubt. What does this mean for California employers? That preliminary injunction does not impact the California minimum exempt salary, so employers here must continue to comply with the California salary requirement, which is higher than the existing FLSA minimum salary. Note that as of January 1, 2017, the California minimum salary increase from the current $41,600 to $43,680 annually. California’s duties test for exempt employees will remain unchanged.
If You’re an Employer – Reconsider Salary Adjustment Until Further Notice.
Employers that have already increased salaries in the anticipation of the new federal rule should consider maintaining those increases given that the validity of the new rule is still uncertain, not to mention employee morale at the prospect of a salary cut. Employers that have not already increased salaries should continue to ensure that their exempt employee salaries meet the California standard while the FLSA rules are being sorted out.
Need More Information? Let Champion Employer Services Help!
As professionals in employer services in Chatsworth, we continuously stay up to date with new employee laws, procedures & protocols. If you have further questions regarding this new rule and/or the status of the rule, call us @ (800) 513- 2153.
- 27 Feb, 2017
- Tom Elias
- 0 Comments
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