Fair Labor Standard Act (FLSA) rules update:
On December 1, 2016, the Department of Labor was ready to enact a new labor law to increase salaries under the Fair Labor Standards Act (FLSA). The increase focused on white collar workers who do not receive overtime pay due to their exempt employee status. President Obama has pushed hard to see that this pay increase goes into law. His efforts increased exempt thresholds and would effectively allow for millions of Americans to be able to share in this pay increase. With this new law, an exempt employee making less than $48,892 would be eligible for overtime pay. The threshold previously set at $23,660 resulted in many employees working far beyond 40 hours per week and receiving no overtime compensation. This was to be a triumphant victory for President Obama and many workers who have felt over worked and underpaid. But the effective date of this new overtime law has come and gone, and many workers have yet to enjoy the new salary benefit. Why?
Lawsuit and injunction:
Because of this new overtime rules update, 21 states filed a lawsuit to prevent this labor law from going into effect, stating that this ruling is not in accordance with congressional authority. In response, the court has issued an injunction putting this ruling on hold until a final decision is made. This has placed many employers in a difficult position as they have taken appropriate actions to become compliant with this ruling through either moving employee status to non-exempt or increasing salaries.
Many speculate that this injunction may provide the time needed to allow for President-elect Trump to defeat the ruling or at the very least create exemptions for small businesses. At this time employees and workers can only wait to see what happens next.
Poster Compliance Center will keep you informed on further developments regarding this FLSA rules update concerning extended overtime pay protection.