Federal Labor Standards Act Changes Blocked

By Lea Hensel, UNI Business and Community Services

As many of you probably already planned for, today was to be the date the new changes to the Fair Labor Standards Act would go into effect. However, the lawsuit that was filed in September by 21 states, including Iowa, went before a Texas judge last week. At the end of the day on Tuesday, breaking news hit the internet.

The lawsuit was filed in Texas and Judge Amos Mazzant issued a preliminary injunction to delay the FLSA implementation stating that the rule “exceeds the Department’s [Department of Labor] authority.” In a nutshell, he says that if Congress intends to raise the minimum salary threshold then that should come from Congress, not the DOL.

What That Means

Well, the DOL strongly disagrees and is looking into an appeal that would go through the 5th Circuit. But as of right now, the new rules have been indefinitely delayed for all employers. Judge Mazzant is currently accepting arguments from both parties but it’s unsure if anything will happen before January 20, 2017, when the President-elect is sworn in as President. With a new secretary of the DOL, that has yet to be announced, and changing administration, it is unsure what the future will be for the FLSA.

What That Means for You

That depends. Have you already taken initiatives to re-classify employees or are employees expecting overtime compensation changes as of December 1? If so, then at this point, it’s up to you how you handle that. The increased overtime compensation will no longer be required but taking that away could result in some backlash from employees if they were expecting it.

The biggest key to moving forward – communication. Leave little doubt for your employees about the courses of action you plan to take in this interim period.