FLSA federal delay: What does it mean?
Benefits administrators have an important obligation to understand legislative actions and to distribute that information – in a user-friendly format. The new presidential administration has proposed a number of changes that would impact workers, including the repeal and replacement of the Affordable Care Act with the American Health Care Act.
It's crucial for company leaders to stay up-to-date on potential regulations. In the past year or so, the Fair Labor Standards Act has received a fair amount of attention due to its proposed overtime update and its subsequent delay. Let's take a closer look:
An overtime update
The proposed overtime rule, developed by the Obama administration, would have altered the existing regulation in many ways. It nearly doubled the salary threshold for employees, meaning any worker who made under the limit would be eligible to earn additional pay.
The former cap was $23,660 per year and $455 per week. The update proposed an increased limit of $47,476 per year or $913 per week. The regulation, which was originally set to go into place on Dec. 1, 2016, also established a plan for automatic updates to this threshold every three years.
"The overtime rule was blocked by a judge in Texas."
A final hour delay
On Nov. 22, 2016, U.S. District Judge Amos Mazzant passed a temporary ruling putting the overtime regulation on hold. The goal was to take a closer look at the rule, which was approved by the U.S. Department of Labor, and decide whether it was in the best interest for all parties involved, according to The Hill.
The action by Mazzant essentially put the proposed legislation on the back burner, meaning the approved rule wouldn't come to fruition under former President Obama. The DOL previously fought against the ruling in the 5th Circuit Court of Appeals before asking for a 60-day extension to file its final brief pushing the deadline to May 1.
The reason for the DOL's extension was the lack of Secretary of Labor under the new administration. Trump's first nominee – former Carl's Jr. CEO, Andrew Puzder – withdrew in February. The president called upon former U.S. Department of Justice official R. Alexander Acosta, to take the position. Acosta was formally confirmed by the Senate on April 27.
The future of the rule
There are many scenarios that could play out, affecting the proposed overtime rule. The DOL could drop its appeal, effectively forfeiting the regulation itself, or the agency could attempt to alter the legislation – which would require a new notice of rulemaking as well as a comment period before President Trump would have to sign off.
Right now, a lot rests on Acosta's future decisions . During his nomination hearing, he indicated that the department's first decision would be surrounding the choice to continue the appeals process or to revise the rule instead. He also stated that he believed the salary threshold would be somewhere around $33,000 instead of the proposed $47,476, according to the Society for Human Resource Management.
It's important to note that some states have their own overtime regulations in place, usually for hourly employees who work over 40 hours per week, according to Workplace Fairness.
Benefits leaders should keep their eyes on this regulation, especially now that a new labor secretary has been confirmed. This legislation will impact a number of employees, so companies should be prepared to make changes if the rule is put in place.