Ask The Lawyer: I heard a lot of noise last year about some managers being reclassified as hourly workers, but then nothing happened. What’s going on?
NEW OVERTIME RULES MAY BE DOA; NO RAISES FOR SALARIED WORKERS LIKELY
QUESTION: I heard a lot of noise last year about some managers being reclassified as hourly workers, but then nothing happened. What’s going on?
ANSWER: Revisions to Department of Labor regulations that would have strengthened overtime protections for “managerial” workers were supposed to go into effect on December 1, 2016. But, as you noticed, they didn’t. And it doesn’t look like they’re going to be implemented any time soon.
On November 22, 2016, a federal District Court judge in Texas issued a nationwide injunction blocking imposition of the rule, which would have required employers to pay salaried workers at least $47,476 per year. The rules hoped to address the problem of the misclassification of supervisory workers as managers. The result of this common practice is that many managers – especially in retail — work well over 40 hours a week for a salary that is much less than the weekly earnings of the workers they supervise.
Employers who re-classified low-level managers as hourly employees, or who gave their managers a raise, are probably not going to revert to their earlier practices although they could do so. Employers who had not implemented the new rule when it was challenged last November are probably going to wait to see what happens.
The Department of Labor (DOL) under the Obama administration appealed the District Court’s ruling to the Fifth Circuit Court in December. But nothing much has happened since then. Last month, the Department of Justice in the new administration, which is representing the DOL in the appeal, asked for additional time – until June 30 — to submit its brief. It is likely that newly-confirmed Secretary of Labor, Alexander Acosta, will let the appeal fade. At his confirmation hearings in March, Acosta indicated he believed overtime rules could use a tweak, but said the Obama-era update would unfairly punish many employers.
In the meantime, Republicans in Congress have proposed their own new approach to overtime – a bill that would allow employers to offer workers compensatory time in lieu of pay for overtime. The Working Families Flexibility Act of 2017, passed on May 2, 2017, would amend the Fair Labor Standards Act to allow employers to offer employees 1.5 hours comp time for every hour of overtime worked. In order to accrue comp time under the bill, employees would have to be continuously employed for one employer and work at least 1,000 hours (25 weeks at 40 hours per week) in the 12-month period “before the date of agreement or receipt of compensatory time off.” Employees would be allowed to choose the pay instead of the comp time, if they wished.
The maximum amount of comp time that could be accrued in one year would be 160 hours (about four weeks), unused comp time would have to be paid at the end of a 12-month period. Omitted from the bill is a guarantee that employees can use their comp time (with notice) when they wish.
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ASK THE LAWYER
By: Daniel A. Gwinn, Esq.
Attorney and Counselor at Law
GWINN TAURIAINEN PLLC
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3300
(248) 247-3310 facsimile
daniel@gwinnlegal.com
http://www.gwinntauriainenlaw.com/