On November 22, 2016, U.S. District Judge Amos L. Mazzant issued a temporary injunction placing the December 1, 2016, changes in exempt salary minimum payments on hold.
In May 2016, the U.S. Department of Labor published a new rule to increase the exempt salary minimum for white collar exemptions (i.e., executive, administrative, and professional) from $23,600 per year to $47,476 per year. 21 states and over 50 business groups sued to stop enactment of this rule, on the basis that it would lead to significant economic harm. Judge Mazzant issued a temporary injunction stopping enforcement of the December 1 salary increase, stating that the Obama Administration overstepped its authority in creating the salary increase.
The injunction is on appeal and under review, and it is possible that the rule could go into effect if the Fifth Circuit Court of Appeals issues a countermanding order. However, at this time, no salary increase rule will be in effect on December 1.
Regardless of the suspension of the FLSA rule by the Fifth Circuit, employers may still see required wage increases for exempt employees based on state minimum wage laws. If your state will be raising the minimum wage for non-hourly employees in 2017, you may also need to raise the salary for exempt employees in accordance with state law.
Employers have a few options with how to deal with the ever-changing salary minimum laws:
- Any salary increases to the $47,476 annual salary may be rolled back, but if a countermanding order is issued and the December 1 rule is implemented, this salary increase will need to go back into effect.
- Any changes from exempt to non-exempt based on $47,476 minimum salary may be rolled back, but again, if a countermanding order is issued, these need to go back into effect.
NEW I-9 Requirements
On November 14, 2016, the Dept. of Homeland Security issued a new Form I-9. This is the form completed for all new and rehired employees, and must be completed within the first 3 days of employment. The new Form I-9 version must be used for all new employees and/or rehired employees coming on board on or after January 21, 2017. You do not – and should not – complete new Form I-9s for existing employees based on this form update.
The new form and instructions can be found here: https://www.uscis.gov/i-9. Please contact our office if you have any questions about the new form, I-9 completion, and I-9 storage and retention policies.