As school lawyers, we LOVE to prattle on about the Fair Labor Standards Act. Don’t believe us? Check out here, here, here, and here for a PTSD flashback to prior blog posts. For those of you who have been around here long enough (“long enough” defined as 2019), you might remember the hubbub about the Obama Administration’s new overtime rules which proposed to require employers pay at least $913 per week in order to treat an employee as exempt for overtime purposes. This proposal was kiboshed when a Texas judge in the Fifth Circuit blocked the rule. Under the Trump Administration, the minimum salary for exemptions was increased to $684 per week from $455, which is the current salary basis test today.
Fear not, politics are the gift that keeps on giving for school lawyers! The Biden Administration announced a notice of proposed rulemaking that would “restore and extend overtime protections to 3.6 million salaried workers.” The proposed change would increase the salary basis test to $1,059 per week, the equivalent of $55,068 per year. Currently, the proposed rule is in the 60 day comment period which closes November 7, 2023. If the rule is adopted, we anticipate there will be court challenges to the increase, similar to the Obama Administration era. The bad news? This change will certainly result in schools either increasing salaries for individuals who currently qualify as exempt or moving those individuals to an hourly pay rate with overtime at time and a half.
You might be wondering, what is the good news? The good news is the rest of the test to determine if an employee is exempt for purposes of overtime remains the same: 1) the employee must be paid a salary, 2) the amount of salary paid must meet the minimum specified amount (currently $684 per week), and 3) the employee’s job duties must primarily involve executive, administrative, professional, or computer employee duties as defined by the duties test. Reminder, you cannot simply pay someone a salary to avoid the overtime rules. The employer bears the burden of correctly classifying an employee as exempt under the FLSA. (Is now a good time to recommend a FLSA audit? Look at whose smiling face you can have visit your school!) These new regs do continue to treat teachers and community member coaches as exempt under the FLSA, even if their salary does not meet the new threshold. This is a longstanding tradition in the FLSA that would really complicate things like collective bargaining if changed. Thankfully, that isn’t part of the proposal, so if the proposed changes are implemented it would mostly affect classified staff
As always, we will send out another blog post when the DOL finalizes the rule. If your District has any questions about the FLSA or these proposed regulations, please feel free to contact Karen, Steve, Bobby, Coady, Jordan, Tyler, or Sara at 402-804-8000 or by sending all of us an email at ksb@ksbschoollaw.com.
P.S. For all the business officials and HR people reading, the U.S. Citizenship and Immigration Services released an updated I-9 Form on August 1, 2023. You can use old I-9 forms until October 31, 2023 but starting on November 1, 2023, the new forms should be used for new hires. One of the changes on the form allows remote examination via E-verify.