A little good news sneaks in for employers

Posted9/17/2017 1:00 AM

Some days, turmoil seems to be everywhere.

• There's jaw-dropping hurricane damage, then typically American how-can-we-help cleanup support. Small businesses are on both sides -- some hurting, others helping.


Earlier this year, for example, small businesses were among those battling floods in the Chain O' Lakes-Fox Valley and Des Plaines River communities, while friends and customers filled sandbags.

• Businesses that employ Dreamers may or may not have staffing holes to fill. Dreamers are undocumented workers brought to the United States as children and given permission to stay by the Obama administration as long as they are, basically, positive contributors to society.

The Trump administration seems less lenient, however.

• It seems likely that the Equifax breach will complicate credit decisions for both business owners wanting to borrow and customers seeking credit.

But for small businesses worried about payroll costs, there is a piece of good news: The Obama-era Department of Labor rules that would have raised the salary threshold for exempt employees to slightly more than $47,000 from $23,600-plus, are dead. (Exempt employees are salaried workers you do not have to pay overtime even when they work more than 40 hours a week.)

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So says U.S. District Court Judge Amos Mazzini, who last November temporarily blocked the rule from taking effect and who on August 31 issued an order permanently blocking the DOL proposal.

The Trump administration is not expected to appeal.

"The (overtime) rules are dead," says attorney Sean Darke. "The U.S. District judge made a decision. The DOL withdrew its appeal."

Darke is a shareholder in Wessels Sherman's Chicago office. The Minneapolis law firm, which also counts a St. Charles office among its five locations in four Midwestern states, specializes in pro-management labor and employment law.

The rare piece of good news for employers is that they can forget about the new salary level of $47,476 for overtime. But there's a "but."


"There's a new administration in town that has said it's probably going to raise the overtime salary threshold," Darke says. New Labor Secretary Alexander Acosta "already is in the process of developing new (overtime) regulations that are likely to differ substantially" from those issued by the Obama administration.

One potentially positive difference is the projected overtime salary level, thought to be about $33,000, Darke says.

Two issues seem to stand out: One is whether the DOL actually has the authority to set salary structures for exempt employees, something it apparently has been doing since the Fair Labor Standards Act became law in 1938.

The other issue is more basic: What should business owners do now? Darke suggests two approaches.

"Hold fast to your normal salary plan" until the overtime rules get worked out, he says, and use the intervening time to conduct an audit that assures your job classifications meet existing rules. It's the job duty test that ultimately determines which employees qualify for overtime, Darke says.

• Follow Jim Kendall on LinkedIn and Twitter. Write him at Jim@kendallcom.com. Read Jim's Business Owners' Blog at www.kendallcom.com. © 2017 Kendall Communications Inc.

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