Adjusting Wage Rates? Be Mindful of State Notice Requirements
Even employers who were opposed to the new overtime regulations are in a quandary after the District Court for the Eastern District of Texas enjoined the Department of Labor from implementing new salary thresholds for the FLSA’s “white collar” exemptions.
Will the injunction become permanent? Will it be upheld by the Fifth Circuit?
Will the Department of Labor continue to defend the case when the Trump Administration is in place?
What does the rationale behind the District Court’s injunction (that the language of the FLSA suggests exempt status should be determined based only on an employee’s duties) mean for the $455-per-week salary threshold in the “old” regulations?
Whether employers can reverse salary increases that already have been implemented or announced is an issue that should be approached carefully.
For example, employers should be aware that state law may specify the amount of notice that an employer must provide to an employee before changing his or her pay.
In most states, employers merely need to give employees notice of a change in pay before the beginning of the pay period in which the new wage rate comes into effect.
But some states require impose additional requirements. The New York Department of Labor, for example, explains that if the information in an employee’s wage statement changes, “the employer must tell employees at least a week before it happens unless they issue a new paystub that carries the notice. The employer must notify an employee in writing before they reduce the employee’s wage rate. Employers in the hospitality industry must give notice every time a wage rate changes.”
Maryland (and Iowa) requires notice at least one pay period in advance. Alaska, Maine, Missouri, North Carolina, Nevada and South Carolina have their own notice requirements.
Employers who are making changes to wage rates based on the status of the DOL’s regulations should be nimble – while also making sure that they are providing the notice required under state law.