Wow, this has been one crazy roller coaster ride.
Season 1 of this overtime soap opera kicked-off with President Obama directing the Secretary of Labor to “modernize and streamline” the “white collar” FLSA exemptions. In May 2016, the DOL published revised regulations that increased the exempt salary threshold from $455 per week ($23,600 annually) to $913 per week ($47,476 annually), and even included a mechanism for automatic, future adjustments. The DOL set the “go live” date as December 1, 2016.
Chaos ensued. HR professionals spent the next several months tackling compliance issues, and the financial side of the house spent the next several months asking, “How are we going to pay for this?”
Mid-season in the soap opera, with the presidential election around the corner, several states and business groups sued the DOL and sought an emergency injunction in a Texas federal court. Suspense.
And then it happened. On November 22, 2016, a few weeks after President Trump’s victory, merely 8 days before the regulatory “go live” date, and after some employers already had increased salaries to the $913 per week threshold, the Texas court entered a nationwide, temporary injunction. Drama at its best.
Of course, we all saw the next development coming from miles away — an appeal by the DOL. Then, over the next several months, we witnessed a whole host of legal gymnastics as the Trump administration ironed out a game plan. Most doubted that the Trump administration would stand behind the Obama administration’s regulations.
Did you catch the season finale last month? Brilliant. On August 31, the Texas trial court granted summary judgment for the states and business groups that had taken-on the DOL. In a nutshell, the court dubbed the regulations “invalid” because the dramatic increase in the salary threshold effectively obliterated the “white collar” exemption “duties tests.”
Game over (for now). Victory for employers (for now). A thrilling ending to a dramatic and emotional season.
But what’s next? Will the network renew for a Season 2?
Pre-production is ramping up. Secretary of Labor Acosta is of the opinion that the salary threshold should be increased, just not to the $913 per week level. It remains unclear, however, whether the DOL even has the authority to establish or increase a salary threshold for the “white collar” exemptions, so expect that open issue to heat-up rather quickly.
In light of the drama that has unfolded over the past few years, all I can say for now is STAY TUNED and fasten your seatbelt.