A revision: What is the fate of the increase in the exempt level salary increase?

by Michael Haberman on April 27, 2017 · 0 comments


What will the Trump administration do with the FLSA?

I wrote this post on April 10th. Since then there has been yet another change. The hearing on this is now delayed until June 30th. The Trump administration has pointed out to the court that the Department of Labor does not yet have a leader. Daniel Acosta has yet to be confirmed by the Senate. According to an article from SHRM, Overtime Reply Brief Delayed Until June 30, the hearing could go a couple of ways. It could just be uncontested and die from the point of view of the Trump administration. However, this would open the door for the Texas AFL-CIO to step in and context the stay. They have a large stake in this, because if the increase occurs they stand to gain a lot of potential union nonexempt targets. Many people think the DOL should continue with hearing and change the salary level to something, $33,000, considered to be more reasonable than $47,476. We will have to wait and see now on June 30th. I am sure this will be a topic of discussion at the SHRM conference in New Orleans. 

As most of you know last December 1, 2016 the salary level that qualified an employee as being considered an exempt employee was supposed to increase. It did not. On November 22, 2015 a Texas judge issued an injunction to stop the increase from going into effect.  According to the National Law ReviewAs expected, on December 1, 2016, the Department of Justice (then under the President Obama administration), on behalf of the DOL, filed a notice with the U.S. Circuit Court of Appeals for the Fifth Circuit to appeal the order. The DOL sought to fast-track the appeal, asking the Fifth Circuit Court of Appeals for an expedited schedule.  The Fifth Circuit initially granted the request, and issued an order to expedite the legal arguments, with the DOL’s reply brief to be filed by February 7, 2017.” But then we had a change in administration! As a result the new administration filed for an extension to allow the new leadership of the DOL to figure out what they would want to do about pursing the stay. The Fifth Circuit granted them a delay until May 1, 2017.

Horns of a Dilemma

May 1, now June 30th,  provides the Trump Administration with a looming dilemma. What is the Department of Labor going to do under a president who in his past has touted himself as being pro-labor and worker friendly, but is currently pro-business? Some people have suggested that the exempt salary level will go up, but not as steeply as was suggested by the Obama DOL, an increase from $23,660 to $47,476. Perhaps someone will suggest a compromise at a more palatable $35,000 per year. Would this assuage both sides? Perhaps, though for some companies that would still be a tough pill to swallow, but for many other companies, that would be an attractive amount to deal with. It would become more palatable if nonprofits got a break from that increase, perhaps an even smaller increase.

We will have to wait and see what happens at the end of this month.


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