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FLSA – What happened, and what’s next?

Thursday, December 1, 2016   (0 Comments)
Posted by: Laura Daugherty
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New Overtime Regulations Put on Hold

What happened?
As you may well know, last summer the United States federal government put a plan in place to change the minimum wage and overtime requirements under the law titled the Fair Labor Standards Act (FLSA); the changes outlined in FLSA were scheduled to be put into effect on December 1, 2016 (today!).  In a last minute effort, Judge Amos Mazzant of the United States District Court for the Eastern District of Texas issued an order to put the implementation of FLSA on hold.

On Tuesday, November 22 the attorneys general of 22 states filed an injunction that argued, among other things, that the enforcement of FLSA would infringe on the 10th Amendment of the United States Constitution; in other words, their argument is that the federal government cannot infringe on state’s rights, particularly in regards to setting salary standards for state and local employees. An injunction is a court order requiring a person to do or cease doing a specific action, and in this case it means to halt the implementation of FLSA.


What’s next?

While the implementation of FLSA is on hold, there are three courses of action that the court might pursue:

1.     PETITION - Immediate Appeal: If granted an appeal, the case would be elevated to the Fifth Circuit court for review. Since 1972, the Fifth Circuit has rarely overturned orders granting preliminary injunctions; this simply means that the injunction will most likely remain in place throughout the lengthy appeal process.

2.     MOVE FORWARD - Reconsideration & Final Judgment: If the court for immediate final judgment reconsiders the case, it is highly unlikely that anything outlined in FLSA would change. If final judgment is made in favor of the federal government, everything outlined in FLSA will move forward as-is.

3.     WAIT - Suspend & Amend after January 20: Due to the current political climate, it is also a possibility that no judgment will be made until after President-Elect Donald Trump’s new administration selects a Secretary and Solicitor of Labor. If this course of action is taken, it is likely that FLSA will be amended so that the salary threshold is higher than the current $23,660, but will be lower than the suggested $47,476.

 

What are other institutions doing?
Institutions across the country have all been preparing for FLSA implementation at different paces; therefore, their reactions to the delayed implementation vary greatly.

1.     Full Stop: Some institutions are in the process of rescinding salary increases, or halting the process where it stands until a ruling is made.

2.     Full Steam Ahead: These institutions are moving forward as if the injunction didn’t happen, and as if FLSA will be implemented as planned.

3.     The Hybrid: A majority of institutions are somewhere in the middle. These institutions have mitigated raises for some employees, continued moving forward in the FLSA review if job duties were already questionable for some individuals, and stopped the review with other job classifications.

 

What should you be doing?
While there isn’t one correct course of action, there are some practices that you can keep in place to alleviate growing tensions on your campuses.

1.     Keep Communication Clear: Address employees, managers, and other stakeholders about what is happening. Focus on the fact that you want to comply with federal and state law, and that as an employer you value your employee’s patience, understanding, and continued hard work. Employees, as well as employers, are understandably anxious as to how FLSA will affect their campuses. No matter the ruling – you are in this together, and will only get through this if you present a unified front.

2.     Keep Abreast of the Court’s Decision: Once a ruling is made, implementation will be swift. While it is difficult to know how long an appeal process may take, once a decision is made employers will have to comply promptly.

3.     Coordinate with Human Resources: Because FLSA may be in direct violation of states’ rights, it is important to be aware of what your state’s employment regulations are. Penalties under state law are often greater than federal law, and your institution’s human resources department will be the best resource on this topic.


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