Category: salary threshold

  • Overtime Rule Blocked for Public Institutions in Texas; House Advances Legislation Aiming to Block Overtime Rule – CUPA-HR

    Overtime Rule Blocked for Public Institutions in Texas; House Advances Legislation Aiming to Block Overtime Rule – CUPA-HR

    by CUPA-HR | July 1, 2024

    Update: On November 8, the federal judge from the Eastern District of Texas is set to hold a hearing on summary judgement in the business community’s challenge to DOL’s overtime final rule. While it is unknown how soon after we could get a decision on the validity of the rule, the judge could rule from the bench or quickly after the hearing. CUPA-HR will send out updates on the rulings as soon as we know.

    On June 28, a federal judge in the Eastern District of Texas Court granted a narrowly scoped preliminary injunction for the overtime rule in the state of Texas, blocking the Department of Labor’s overtime final rule from taking effect on July 1, 2024. The judge only blocked enforcement for employees of the state of Texas (i.e., public institutions), so private institutions in Texas and all other institutions outside of Texas will still need to comply with the overtime rule beginning July 1, 2024.

    The motion for a preliminary injunction was filed by the state of Texas alongside a lawsuit challenging the validity of the final rule in its entirety. At least two other lawsuits are currently pending before the Eastern District Court of Texas. The preliminary injunction will block the final rule from taking effect on July 1 for public employers and employees in Texas until a later decision is issued on the lawsuits challenging the validity of the final rule.

    As a reminder, the final rule implemented a two-phase approach to increasing the minimum salary threshold under the Fair Labor Standards Act overtime regulations. The first increase was expected to take effect on July 1, increasing the minimum salary threshold from the current level of $684 per week ($35,568 per year) to $844 per week ($43,888 per year). The second increase is set to take effect on January 1, 2025, and it would increase the minimum salary threshold again to $1,128 per week ($58,656 per year). The final rule also adopted automatic updates to the minimum salary threshold that would occur every three years.

    Given the judge’s narrow decision granting the preliminary injunction, private institutions in Texas and all institutions outside of Texas are still required to implement adjustments to comply with the July 1 minimum salary threshold until a later decision is made on the validity of the rule as a whole. CUPA-HR will be monitoring the pending cases closely.

    House Appropriations Subcommittee Bill

    On June 26, the House Appropriations Subcommittee on Labor, Health and Human Services, and Education released their fiscal year 2025 funding legislation for the Department of Labor (DOL) and other related agencies, which included a provision to prohibit any funding provided to DOL under the bill from administering, implementing or enforcing the overtime final rule. The Subcommittee passed the legislation out of Committee during a markup on June 27. It will now be sent to the floor for a vote, where House Republicans have a slim majority and could pass the bill along partisan lines. The fate of the overtime provision appears uncertain in the Senate, however, as the Democrat-controlled chamber is unlikely to include such language in their appropriations bill. CUPA-HR will continue to keep members apprised of any updates on the status of the overtime final rule.



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  • Overtime Rule Challenged in Federal Court – CUPA-HR

    Overtime Rule Challenged in Federal Court – CUPA-HR

    by CUPA-HR | May 23, 2024

    On May 23, a group of 13 local and national associations and Texas businesses filed suit in federal court in Texas, challenging the U.S. Department of Labor’s rule setting new minimum salary thresholds for the white collar overtime pay exemptions under the Fair Labor Standards Act (FLSA).

    The final rule of April 23, 2024 increases the minimum salary threshold to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. The rule also implements automatic updates to the threshold that will occur every three years. The suit claims that the salary threshold that goes into effect on January 1, 2025, is so high it will result in more than 4 million individuals being denied exempt status, even though these individuals could be reasonably classified as exempt based on their duties, and in doing so, the rule violates both the statutory language of the FLSA and prior court decisions. The suit also challenges the automatic updates.

    The following are plaintiffs in the case: Plano Chamber of Commerce, American Hotel and Lodging Association, Associated Builders and Contractors, International Franchise Association, National Association of Convenience Stores, National Association of Home Builders, National Association of Wholesaler-Distributors, National Federation of Independent Business, National Retail Federation, Restaurant Law Center, Texas Restaurant Association, Cooper General Contractors and Dase Blinds.

    CUPA-HR will be following the case closely and provide you with regular updates.



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  • DOL Increases Overtime Minimum Salary Threshold to $58,656 in Final Rule, Implements Automatic Updates – CUPA-HR

    DOL Increases Overtime Minimum Salary Threshold to $58,656 in Final Rule, Implements Automatic Updates – CUPA-HR

    by CUPA-HR | April 23, 2024

    On April 23, the Department of Labor (DOL) issued the highly anticipated final rule to alter the overtime pay regulations under the Fair Labor Standards Act (FLSA). The rule increases the minimum salary threshold to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. The rule also implements automatic updates to the threshold that will occur every three years. Institutions will need to make all necessary adjustments by July 1, 2024, in order to be in compliance with the final rule.

    The department clarified that the first increase updates the minimum salary threshold using the department’s current methodology, which was used in the 2019 Trump-era overtime rulemaking to set the current standard of $35,568. The second increase then implements the department’s new preferred methodology, which sets the minimum salary threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest wage census region. This phased-in implementation will likely impact how litigation challenging the rule is both pursued and decided over the next six months.

    In September 2023, DOL issued its proposed rule to update the minimum salary threshold, which sought to increase the threshold from its current level of $35,568 annually to $60,209 — a nearly 70% increase. The proposed rule also sought to implement triennial automatic updates based on the 35th percentile.

    CUPA-HR submitted comments in response to the proposed rule and participated in a meeting with DOL and officials from the White House Office of Information and Regulatory Affairs (OIRA) to express our concerns with the proposal. In both the comments and OIRA meeting, CUPA-HR made the four following recommendations for DOL to consider before issuing their final rule:

    1. DOL should not update the salary threshold at this time.
    2. DOL should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    Lawsuits challenging the final rule are forthcoming. In the meantime, CUPA-HR will be hosting a webinar on May 8 covering the provisions of the final rule and its impact on higher education. Registration is open and free to all.



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  • White House Approves DOL Overtime Rule – Rule Release Imminent – CUPA-HR

    White House Approves DOL Overtime Rule – Rule Release Imminent – CUPA-HR

    by CUPA-HR | April 11, 2024

    On April 11, 2024, the White House Office of Information and Regulatory Affairs (OIRA) announced it had concluded review of the U.S. Department of Labor’s (DOL) final overtime pay rule. The rule is expected to increase the minimum salary threshold for the executive, administrative and professional (EAP or white collar) employee exemptions to overtime pay requirements under the Fair Labor Standards Act (FLSA) regulations. OIRA review is the final step in the regulatory process, and we expect DOL will release the final rule any day now. We will send another alert as soon as the final rule is released.

    On April 4, 2024, CUPA-HR’s president and CEO, government relations team and board members met with officials from DOL and OIRA to express our concerns with the September 2023 proposed rule. The proposal sought to increase the threshold from its current level of $35,568 annually to $60,209 — a nearly 70% increase. DOL also proposed increasing the salary threshold automatically every three years to the 35th percentile of weekly earnings of full-time salaried workers. Finally, DOL proposed that all employers would need to implement these changes within 60 days of the final rule’s release.

    During our OIRA meeting, CUPA-HR reiterated the concerns that were addressed in our comments submitted in November 2023. The comments made the following four recommendations for DOL to consider prior to issuing a final rule:

    1. DOL should not update the salary threshold at this time.
    2. If DOL implements an increase, it should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    We expect lawsuits challenging the final rule are forthcoming. CUPA-HR will keep members apprised of all updates related to the overtime regulations. Once the new regulations are released, we will plan and share registration information for a webinar. We will also provide an update for members who attend the spring conference in Minneapolis next week.



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  • Department of Labor Sends Overtime Rule to OIRA for Review – CUPA-HR

    Department of Labor Sends Overtime Rule to OIRA for Review – CUPA-HR

    by CUPA-HR | March 4, 2024

    On March 1, the Department of Labor (DOL)’s Wage and Hour Division (WHD) sent the highly anticipated final rule to update Fair Labor Standards Act (FLSA) overtime regulations to the Office of Information and Regulatory Affairs (OIRA) for review. This is a required step in the regulatory process and acts as one of the last steps prior to releasing the text of the regulation to the public.

    OIRA, as part of the president’s Office of Management and Budget, is required to review all proposed and final rules, as well as all regulatory actions, before implementation. While OIRA has 90 days to conduct its review, in most cases, the review takes 30 to 60 days. This means the final rule could be released as early as the end of March or in April, which would meet WHD’s April 2024 target date for release as indicated in the Fall 2023 Regulatory Agenda.

    WHD issued the proposed rule to increase the minimum salary threshold under the FLSA overtime regulations in September 2023. In the proposed rule, WHD sought to increase the salary threshold from its current level of $35,568 annually to $60,209 — a nearly 70% increase.* The proposed rule also sought to implement automatic updates to the salary threshold that would occur every three years and would tie the updated salary threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage census region. Notably, the proposed rule did not include any changes to the duties requirements of the FLSA overtime regulations.

    Comments in response to the proposed rule were due in November 2023. WHD received over 33,000 comments in response to the proposed rule. CUPA-HR, joined by 49 other higher education associations, submitted comments, which made the following recommendations:

    1. DOL should not update the salary threshold at this time.
    2. DOL should lower the proposed minimum salary threshold and account for room and board.
    3. DOL should not implement automatic updates to the salary threshold.
    4. DOL should extend the effective date of any final rule implementing a higher salary threshold.

    The text of the final rule is not public until the rule is published in the Federal Register, so details of the finalized salary threshold and the timeframe for compliance are unknown at this time. While the rule is at OIRA, however, interested stakeholders can request a meeting with the administrator to discuss the proposed changes. CUPA-HR will request a meeting with OIRA to discuss our concerns with the proposed rule.

    CUPA-HR will continue to keep members apprised of all updates as it relates to the FLSA overtime final rule.

     

    * The discrepancy between our figure of $60,209 and the DOL’s preamble figure of $55,068 arises from DOL’s own projections based on anticipated wage growth. The DOL’s proposed rule is rooted in 2022 data (yielding the $55,068 figure), but a footnote in the Notice of Proposed Rulemaking confirms that the salary threshold will definitely change by the time the final rule is issued to reflect the most recent data. Our comments, aiming to respond to the most probable salary threshold at the time a final rule is released, reference the DOL’s projected figure for Q1 2024, which is $60,209. We do not believe DOL will be able to issue a final rule before Q1 2024, so we are incorporating this projected figure into our response to the NPRM. In essence, our goal is to provide members with a clearer picture of the likely salary figure when the final rule comes into play.



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  • CUPA-HR Submits Comments in Response to DOL’s Overtime Rulemaking – CUPA-HR

    CUPA-HR Submits Comments in Response to DOL’s Overtime Rulemaking – CUPA-HR

    by CUPA-HR | November 8, 2023

    On November 7, CUPA-HR, joined by 49 other higher education associations, submitted comments in response to the Department of Labor (DOL) Notice of Proposed Rulemaking (NPRM) to update the Fair Labor Standards Act (FLSA) overtime regulations. In the NPRM, the DOL proposes to update the salary threshold for the “white collar” exemptions to the FLSA overtime pay requirements from its current level of $35,568 annually to $60,209 per year — a nearly 70% increase.* Additionally, the department proposes to automatically increase the salary level every three years.

    CUPA-HR’s comments highlight the concerns from institutions across the country and ask that the DOL consider four recommendations:

    1) The DOL Should Not Update the Salary Threshold at This Time

    The DOL most recently updated the minimum salary threshold in 2020. CUPA-HR welcomed updates at the time, given the minimum threshold had not been successfully updated since 2004 and the level proposed in 2019 was appropriate at the time. With the most recent update becoming effective in 2020, we believe it is too soon for the DOL to move forward with another update to the minimum salary threshold.

    2) The DOL Should Lower the Proposed Minimum Salary Threshold and Account for Room and Board

    If the DOL does choose to move forward with an increase to the threshold, we believe that the proposed minimum salary threshold is too high. Updating the salary level from $684 per week ($35,568 per year) to $1,158 per week ($60,209 per year) leads to a nearly 70% increase, which will result in a large number of employees being reclassified to nonexempt status. To avoid having to reclassify certain employees to nonexempt status, we ask that the DOL consider room and board as part of an employee’s total salary when considering if such employees meet the minimum salary threshold.

    3) The DOL Should Not Implement Automatic Updates to the Salary Threshold

    In the NPRM, the DOL proposes to implement automatic updates to the salary threshold that would occur every three years. CUPA-HR believes that the DOL does not have the authority to implement automatic updates under the FLSA and that automatic increases will negatively impact institutions’ budgets, their ability to provide merit-based increases, and employee morale.

    4) The DOL Should Extend the Effective Date of Any Final Rule Implementing a Higher Salary Threshold

    According to the NPRM, the DOL anticipates providing 60 days for compliance with a final rule once it is published by the agency. CUPA-HR believes 60 days is too short a timeframe to assess the impact, plan, and implement appropriate changes on campus. Instead, we ask for an effective date that is at least 180 days after any final rule is published.

    CUPA-HR’s president and chief executive officer, Andy Brantley, shared the following: “To say campuses are extremely concerned with the Department of Labor’s proposed rule increasing the minimum salary threshold to the FLSA overtime pay requirements by almost 70% would be an understatement. Employees in positions that clearly meet the three criteria to qualify as white-collar employees who are exempt from the federal overtime pay requirement will be forced into nonexempt positions.”

    In addition to submitting these comments, CUPA-HR also joined the Partnership to Protect Workplace Opportunity’s comment letter addressing concerns with the proposed rule. CUPA-HR will keep members apprised of any updates relating to this proposed rule and our advocacy efforts as the department moves toward finalizing these regulations.

    * The discrepancy between our figure of $60,209 and the DOL’s preamble figure of $55,068 arises from DOL’s own projections based on anticipated wage growth. The DOL’s proposed rule is rooted in 2022 data (yielding the $55,068 figure), but a footnote in the NPRM confirms that the salary threshold will definitely change by the time the final rule is issued to reflect the most recent data. Our comments, aiming to respond to the most probable salary threshold at the time a final rule is released, references the DOL’s projected figure for Q1 2024, which is $60,209. We do not believe DOL will be able to issue a final rule before Q1 2024, so we are incorporating this projected figure into our response to the NPRM. In essence, our goal is to provide members with a clearer picture of the likely salary figure when the final rule comes into play.



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