FLSA Overtime Rules Delayed

Prior to November 22, 2016, many in the Human Resources field had been abuzz about the enactment of the Fair Labor Standards Act (FLSA) Final Rule. For some organizations, months of preparation for the December 1st change included reviewing job descriptions, in order to determine the position’s exemption status, and making changes to employee salaries vis-à-vis the new exempt threshold. However, on November 22, 2016, Judge Amos Mazzant III enacted an injunction, successfully halting activation of the new FLSA rules. The preliminary injunction is based off the challenge by several states, business groups, and the U.S. Chamber of Commerce. The plaintiffs claim the DOL has overstepped its authority by raising the salary threshold for exempt status excessively high. Of course, this injunction raises new questions. What is the Department of Labor’s (DOL) response? What do organizations do in the meantime?

The DOL’s official response to injunction was as follows: “The Department strongly disagrees with the decision by the court, which has the effect of delaying a fair day's pay for a long day's work for millions of hardworking Americans. The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule. We are currently considering all of our legal options.”

So what do organizations do in the meantime? While some may speculate that with a Trump administration taking office soon, this mandate may disappear. However, it may not be safe to assume so. The attempt to rollback this rule may not happen right away. There is also the possibility that the Trump administration could issue a smaller increase to the salary threshold than the one initially included in the Final Rule.

Notwithstanding these developments, Michael Maciekowich of Astron Solutions reminds us that the FLSA tests for determining position exemptions have not changed. It is better to be safe than sorry, as a previous court case in Kinkead v. Humana, Inc. demonstrates.

The court case involved a final rule to extend minimum wage and overtime protections to workers who work in live-in domestic services or companion services beginning January 2015. In very similar fashion to the current FLSA overtime adjustments, the companionship exemption enactment was postponed in January 2015, as a federal judge from D.C. struck the rule down, charging that the DOL was overstepping its authority. However, in October of 2015 the U.S. Court of Appeals for the District of Columbia reversed this district court order. Humana argued that they shouldn’t be liable during the period the companionship exemption had been vacated. The courts decided Humanawas liable.

Another aspect to consider is your city and /or state regulations. If adjustments for your organization’s city or state are equal to or higher than the Final Rule’s regulations, organizations would still need to be in compliance with the law that’s most generous to the employee. As always, it is best for organizations to seek legal counsel in order to assuage any concerns from both employers and employees.

What was your organization’s reaction to the late initiated injunction? We look forward to hearing our readers share their input and thoughts on this late-breaking news!

Preparing for Possible Policy Changes in Human Resources

After the election of every new governmental administration, it’s important for Human Resources to take stock of its current concerns and prepare for possible adjustments & new hot topics. The recent presidential election is no different, with its host of new concerns for Human Resources and the general public. With Republican nominee Donald Trump winning the electoral vote for the presidential seat, and a Republican dominated House of Representatives and Senate, those in the field of Human Resources should keep a keen eye out for changes in policies we may have just recently implemented. In this issue of Astronology®, we’ll review some key policies that could possibly be subject to adjustment over the coming months and years.

Fair Labor Standards Act (FLSA) Exemption Rules
Most everyone in HR has been preparing for the December 1st FLSA Final Rule Adjustments announced this past May, and determining which roles are exempt and which are non-exempt moving forward. However, there has been speculation that further modifications under the incoming new administration may include an adjusted exemption for small business. Given that nothing has been stated or implemented definitively, however, employers should maintain their current course, and implement any changes necessary to be in compliance with the FLSA on December 1st.

Federal Minimum Wage
An extremely hot topic for the past two years has been the possibility of raising the minimum wage, with adjustments to meet the rising cost of living across the nation. While in New York the “fast food” minimum wage will gradually be raised to $15 by 2019, the current Federal minimum wage is $7.25. While it is speculated that Congressional Republicans are resistant to any increase, the President-elect previously mentioned that he wouldn’t mind a $10 minimum wage. However, President-elect Trump has noted that he believes states should take responsibility for this matter, or “call the shots.”

Federal Child Care and Paid Leave Support
While campaigning, the President-elect highlighted three facets in regards to federal child care support:

• A dependent care savings account
• Income tax deduction for dependent care
• Six weeks of paid maternity leave

Campaign talk is one thing. Programs put into action are another. There are questions on how these programs could be supported. One economist has speculated that the six weeks of paid maternity leave could encourage employers to drop their own maternity policies and lean on having taxpayers support maternity leave.

The Affordable Care Act
Things are unclear as to what will happen with the future of the Affordable Care Act (ACA). What was initially understood as possibly being totally repealed under a Trump administration, it now appears instead that portions of the ACA will be put under repeal. We’ll have to wait some months to see what features of the ACA will stay the same and what will change.

Astronology® looks forward to tracking the possible new changes in HR coming with the new administration in Washington, D.C. As in the past, we’ll be sure to give further insights as time goes by and more specific policies & adjustments are announced.