On November 22, 2016, a federal judge in Texas blocked the changes to the salaried Executive, Administrative, and Professional exemptions that were set to take effect on December 1, 2016. The injunction was part of a case brought by 21 states who said the rule was unlawful and would substantially hurt small businesses. The judge agreed and blocked the rule from taking effect, leaving many affected employees and employers wondering what would happen next.
Despite this action by this one judge, you may still be legally entitled to the benefits under the new rules. If you have been paid a salary of less than $913 per week or $47,500 per year since December 1, 2016 and are not being paid overtime because you are classified as “exempt”, you should contact us to discuss your situation – it’s free and confidential.
What Did the Rule Changes Consist Of?
The big changes would increase the wage threshold for “white collar” employees to qualify as salaried exempt. The minimum salary was increased to $913 per week or $47,476 per year. The highly compensated employee (HCE) exemption was raised to $134,004 per year. In addition to that, employers would have been able to use salary bonuses for up to ten percent of the salary threshold, but there would have been no changes in the general duties test.
The changes would have had a major impact on a significant portion of the country’s working population. Almost 11 million workers who previously received a salary and no overtime pay would become eligible for overtime under the new overtime pay laws.
What Is Currently Happening with the Rule Changes?
On December 1st, the Department of Labor (DOL) filed an appeal saying that it was the role of the DOL to issue rules on the salary level test, the salary basis test, and the general duties test. However, a new administration took office in January, creating murkiness on what would happen next. The Trump administration asked for more time, citing that it didn’t even have a Labor Secretary sworn in yet.
On February 22nd, 2017, the Appeals Court extended the deadline, giving the Trump administration more time to decide if it will support the new overtime rules. It now has until May 1st to file its brief and continue the appeal. The DOL hopes to have Alex Acosta confirmed and sworn in well before then.
Although there is a strong likelihood that a Trump-controlled DOL will not devote resources to defending the Obama DOL’s new rules, it might seek to change the rule altogether, significantly lowering the salary threshold to about $35,000 per year.
Keep in mind that the blocked rule changes have significant public support and have been endorsed by labor groups including the AFL-CIO. Therefore, it would premature to consider them dead. Although Trump said he did not agree with the rule changes on the campaign, he did promise to support and improve wages for American workers, so it is hard to tell which way he will go now that he is President. We really don’t know what the future will hold.
However, that doesn’t mean workers still don’t have rights. If you believe your employer is not following the overtime rules currently in place and you are owed compensation, please contact our overtime lawyers today at (713) 782-LAW1 (5291) for a free consultation.