November 2016, Vol. 2

Federal judge blocks December 1 FLSA changes

Late Tuesday, November 22, a federal judge in Sherman, Texas, blocked the December 1 implementation of salary threshold changes to the Fair Labor Standards Act (FLSA). In his opinion siding with plaintiffs, including a coalition of 21 states, U.S. District Judge Amos Mazzant III wrote, “The State Plaintiffs have shown a likelihood of success on the merits because the Final Rule exceeds the Department [of Labor]'s authority.”

So what does this mean for Texas school districts? More waiting. The judge’s ruling is a temporary measure designed to put implementation of the rules changes on pause while the legal challenge makes its way through the courts.

Here are three tips for dealing with the judge’s ruling:

1. Don’t undo any changes already in place. If you’ve already implemented salary increases to some exempt employees to meet the salary threshold, don’t reduce their salaries back to prior levels. This would create employee morale issues and an administrative headache. Also, if they’re employees working under a contract with the district, reducing their pay now could run contrary to the district’s contractual obligations.

2. Upcoming salary increases can be postponed, but consider the ramifications. If salary increases to comply with the proposed changes haven’t yet been implemented, the district could take a “wait and see” approach. However, if the district has shared with identified employees that they’ll be receiving a pay increase come December 1, you should consider the ramifications of “taking back” that salary increase with little notice to employees.

3. Keep time-tracking practices in place. For employees who were expected to move from exempt to nonexempt status on December 1, it’s OK to ask them to document time worked starting on December 1. This will help the employees practice good timekeeping habits and will help provide the district with more information about how much time the employees are actually working. The district can then estimate anticipated overtime costs when and if the rules changes are implemented. However, the district should make clear to the employees that they will remain exempt employees and will not earn overtime for the time being.

TASB HR Services will continue to keep our members updated as more information becomes available. Contact hrservices@tasb.org or 800.580.7782 with questions.