Last month, we discussed how the Department of Labor (DOL) was scheduled to implement a new rule that would increase the minimum salary requirements for exempt employees. The new rule published by the DOL would have doubled the minimum salary requirements for employees from $455/week to $913/week. This rule was supposed to take effect on December 1, 2016; however, employers can breathe easy for a bit longer.
On November 22, 2016 a federal judge from the United States District Court in Texas temporarily blocked implementation of the rule, in response to a request by 21 states and business groups. This delay is temporary, while litigation continues and the court makes a determination as to whether the DOL has the authority to implement such a rule.
What does this mean for employers?
Employers should keep in mind that this is only a temporary block, and the rule may go into effect in the future depending on the outcome of the case. Furthermore, if the rule does go into effect, it may be applied retroactively as of the original December 1, 2016 start date. Therefore, while employers now have the option to halt making any changes as of December 1, it would be wise to keep track of those exempt employees that may be affected by the rule, such as those employees that are currently classified as exempt, but are making less than the new proposed minimum salary of $913/week.
What if you have already made changes to employee classifications or salaries to comply with the new rule?
Exercise caution if you are such an employer. While it may be an option to reverse a salary increase or delay its implementation, this could affect employee morale and lead to employee relations issues. In addition, if the law is ultimately approved, there is also the risk the rule may be applied retroactively.
For now, employers should closely follow the case and continuously keep track of the DOL website for updates. Consult a qualified employment lawyer for any questions specific to your business.
The Grady Firm, P.C. attorneys specialize in helping businesses grow and succeed through
employment, business, and immigration law advising for clients in California. They help perform personnel audits, train employers on employment law compliance, provide on-demand legal analysis for hiring and firing questions, and provide leadership and sexual harassment training in English and Spanish.
To learn more about ensuring your business is compliant with state and local laws, schedule a complimentary 15-minute consultation with The Grady Firm’s attorneys; call +1 (949) 798-6298; or fill out a Contact Request Form.
*This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney.
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