In May of 2016 the Obama administration issued a final rule for the Fair Labor Standards Act (FLSA). The FLSA is a federal statute that dates to 1938. When it was introduced it ensured that workers receive a guaranteed minimum wage for all hours worked, created the 40-hour work week, and established overtime at “time and a half” for certain jobs. Over time, the FLSA has been updated and amended and the 2016 final rule was a revision regarding overtime exemptions.
The FLSA states that if an employee works more than 40 hours in a week, then he/she is due additional compensation. Typically exempted from this rule are any so-called EAP or “white collar” employees working in an executive, administrative, or professional capacity. This is because such workers generally earn salaries well above minimum wage and receive benefits that are above average. They also have better opportunities for advancement and more secure jobs. All of these qualities set them apart from the workers who are entitled to overtime pay.
The Department of Labor (DOL) revised the overtime regulations to clearly distinguish between white collar workers who qualify for overtime and true EAP employees who do not need the protection of the FLSA. To do so they updated the salary requirement to $47,4760 from $23,660, the threshold set in 2004. The new rule was set to take effect on December 1, 2016.
Challenges to the Final Rule
Many business groups were immediately against the changes saying it would be too difficult for employers to set flexible schedules and too expensive for small businesses. Opponents of the new overtime requirements from 21 different states filed a lawsuit in Texas. The judge there blocked the DOL rule saying they could not change the law and only Congress has authority to do so. The Obama administration filed an appeal.
A New Administration
President Trump said on the campaign trail that he wanted to eliminate burdensome regulations on businesses like the overtime rule, but so far there has been no new action on the final rule. The new administration filed for two extensions on the pending appeal, so they have until May 1 to issue a brief stating their opinion. The Department of Labor has the option to drop the appeal altogether without addressing the issue of the salary threshold, or it could issue a new ruling. Some Republicans and business leaders have discussed the possibility of $35,000 as a more reasonable salary requirement. When the final rule was announced, there were employers like Wal-Mart, who immediately raised manager salaries above the $47,760 mark so that those employees no longer qualified for overtime payments. Others waited for the December deadline for the rule to take effect before taking action. The new labor secretary will have the chance to reshape labor policy for working Americans.
Middletown Employment Lawyers at McOmber McOmber & Luber, P.C. Advocate for Workers in Wage and Overtime Disputes
Most employers recognize the contributions of their employees, but unfortunately there are a few who try to avoid their responsibilities under the law. At McOmber McOmber & Luber, P.C. we know that you should be paid fairly for the hard work you do. Our Middletown employment lawyers will fight to win you the compensation you deserve. Call us today at 732-842-6500 or contact us online. Our offices are in Red Bank and Marlton, New Jersey and serve clients throughout the state.