Employers are trying to get their bearings on the heels of last month’s amendments to the Fair Labor Standards Act (“FLSA”). As anticipated, the revised rules more than double the minimum salary required to classify employees as exempt with an increase from $23,600 to $47,476.
However, the news is not all dire. The salary threshold will automatically update every three years rather than annually as initially proposed. In addition, the updated rules do not go into effect until December 1, 2016, giving employers sufficient time to evaluate positions and get their house in order. This window also provides employers with an opportunity to review the duties of employees and reclassify those who are not really exempt regardless of the pay level. Finally, subject to certain provisions, the new regulations allow employers to apply nondiscretionary bonuses and incentives, such as commissions, toward satisfying a portion of the minimum salary requirement.
In addition to recovering unpaid wages and overtime, employees may be able to recover liquidated or double damages for a violation of the FLSA. Other damages include recovery for attorneys’ fees so an award for even a nominal amount of underlying wages can result in substantial liability. Employers also should be aware that the law prohibits retaliation against an employee for making a complaint or filing a claim under the FLSA. Retaliation means discriminating or taking adverse employment action against the employee.
Below is a link to the US DOL fact sheet providing an overview of the amended regulations. Please contact a member of our employment law team if we can assist you.