Update On The New Minimum Salary Regulations

Another open question is whether a new Secretary of Labor would try to reissue a salary-related regulation, at least in the immediate future.

by, William T. (Tommy) Simmons

As many of you have heard by now, in the case of State of Nevada, et al v. U.S. Department of Labor, et al, (No: 4:16-CV- 00731), the federal district court in Sherman, Texas has issued a nationwide injunction against enforcement of the Department of Labor’s (DOL) new overtime rule.

This rule would have increased the minimum salary for a white-collar overtime exemption (executive, administrative, professional, or computer professional employee) from the current level of $455/ week by over 100% to a new minimum of $913/week, up to 10% of which could have consisted of bonuses and/or commissions if non-discretionary and paid at least quarterly.

The new regulations would have also increased the minimum salary for a “highly-compensated employee,” which has an easier duties test to meet, to $134,004 per year.

DOL’s official announcement on the injunction and its appeal to the 5th Circuit Court of Appeals is at the following link: www.dol.gov/whd/overtime/final2016/litigation.htm.

The court ruled that the drastic increase in salary was so high that it effectively deleted the duties test for the exemption, which was inconsistent with the intent of Congress when the law was first passed many decades ago.

The court also held that the rule’s provision for automatic increases in the minimum salary every three years exceeded the agency’s authority. The bottom line is that as a result of the court ruling, employers do not have to do anything to increase anyone’s salary at this time.

On December 8, 2016, the 5th Circuit court announced that it would expedite the appeal and hold a hearing sometime toward the middle of February 2018.

As far as next steps for the salary increase are concerned, it is unknown if the new administration will want to continue the appeal process in court, and another open question is whether a new Secretary of Labor would try to reissue a salary-related regulation, at least in the immediate future.

Since that issue could be revisited at any time, and court actions can be difficult to predict, it would be a good idea to frequently check the latest developments on the U.S. Department of Labor’s Wage and Hour Division website at www.dol.gov/whd/.

What Can Employers Expect in 2017?

Although predicting future events is notoriously tricky, many employment law attorneys are expecting the following for their employer clients in 2017:

More debate about an increase in the minimum wage: some in Congress want to raise the federal minimum wage to $10.10 or even $15.00 per hour, and many states have been considering their own increases in the state minimum wage.

In Texas, several bills increasing the Texas minimum wage to $10.10 or $15.00 per hour have been filed as of the end of 2016.

Higher risk of compliance audits: Agencies such as the Equal Employment Opportunity Commission (EEOC) and DOL added hundreds of investigators in the past several years, and the residual effects of programs developed to increase compliance and audit activity will continue to mean that employers must try their utmost to stay abreast of developments in workplace laws and stay on the right side of their employees, at least to the extent possible.

Increased attention paid to protecting whistleblowers and others who file employment related claims or complain about working conditions: The National Labor Relations Board (NLRB), EEOC, OSHA, and the Wage and Hour Division of the U.S. Department of Labor have all stepped up their efforts to minimize retaliation against those who bring workplace problems to light.

U.S. Supreme Court ruling on transgender restroom access: although the case on appeal has to do with a challenge by several states to U.S. Department of Education guidance for schools and students, the ruling may influence other courts when it comes to similar issues affecting employees’ workplace rights.

More difficulty in competing for the best talent: The younger workers entering the workforce now have an easier time imagining themselves spending less time in particular jobs than their older counterparts did 10, 20, and even 30 years ago.

Employers must be ready with innovative ways to attract, motivate, and retain the best employees for their customers.

New Guidance from EEOC on National Origin Discrimination EEOC has issued some very detailed and updated guidance on how it implements Title VII’s prohibition on national origin discrimination.

The guidance document features many useful examples of discrimination based on an applicant’s or employee’s national origin, and the extremely detailed footnotes include listings and descriptions of many court decisions illustrating how national origin discrimination might occur and how an employer might avoid such liability.

Reading the guidance is like taking an entire HR course on the subject. Employers can access the new guidance online at www.eeoc. gov/laws/guidance/national-origin-guidance.cfm.   

No Unemployment Benefits for Employee on FMLA Leave

In the case of Texas Workforce Commission v. Wichita County, 02-15-00215-CV, 2016 Tex. App. LEXIS 13046 (Tex. App.-Fort Worth, December 8, 2016), the court ruled that a county government employee who was on FMLA leave could not draw unemployment benefits while on FMLA leave.

The court reasoned that since FMLA leave is job-protected, and the employment relationship does not end during the period covered by FMLA leave, the claimant was not “unemployed” to the point where she could file a valid UI claim.

In addition, an employee on FMLA leave due to medical inability to work does not meet the eligibility requirement that applies to all UI claims (i.e., a claimant must be medically able to work while filing UI benefit claim certifications).

Finally, the court found that paying an employee who is on FMLA status unemployment benefits is incompatible with the FMLA’s provision stating that FMLA leave does not have to be paid. 

William T. (Tommy) Simmons Legal Counsel to Texas Workforce Commissioner Ruth R. Hughs