Capitol Week-in-Review – November 23, 2016

Breaking News: Judge Halts Implementation of Federal Overtime Pay Regulations

On Tuesday, the United States District Court for the Eastern District of Texas issued a nationwide preliminary injunction of the United States Department of Labor (DOL) Salaried Basis Rules – often referred to as the “Overtime Pay” Regulations.

By way of background, the new regulations were scheduled to become effective on December 1, 2016. The new changes to the Fair Labor Standards Act (FLSA) regulations are applicable to employers covered by FLSA, which includes enterprises with two or more employees and an annual business dollar volume of $500,000 or more, or otherwise engage in interstate commerce.

The principal changes are to minimum salary requirements for employees exempt from overtime pay under the executive, administrative and professional exemptions. More specifically:

  • The minimum salary threshold is raised from $455/week to $913/week ($47,476 for full year worker).
  • The minimum salary for the highly compensated employees exemption will be raised from $100,000 to $134,004. These are employees who are not required to meet the duties test for the managerial, administrative or professional exemptions and are exempt based solely on compensation.
  • Non-discretionary bonuses, incentive pay, and commissions can be counted as salary (up to 10%) providing the payments are made on at least a quarterly basis. (Previously not counted.)
  • Salary levels will automatically be updated every three years commencing January 1, 2020. Minimum salary is to be set at the 40th percentile of full-time salaried workers in the lowest wage census region and 90th percentile for highly compensated employees.

In its decision, the Court states, “the Department’s Final Rule described at 81 Fed. Reg. 32,391 is hereby enjoined.” The Court then goes on, however, to specifically cite regulation changes the DOL is enjoined from “implementing and enforcing.” The specific cites do not include all changes in the Final Rule including changes regarding “highly compensated” employees. While WIB believes that the entire Final Rule is enjoined, we will be watching to see how the DOL addresses any ambiguities.

Litigation over the Final Rule changes may well continue for another year or two and WIB will attempt to keep members informed on its status. In the meantime, the December 1, 2016 implementation date is no longer in effect.

To the extent members have already changed compensation or payroll procedures to comply with the Final Rule, such changes may no longer be necessary. Nonetheless, WIB suggests you seek individual advice from your attorneys before removing changes already implemented.

DWD Launches Online Form to Report Worker’s Compensation Fraud

The Wisconsin Department of Workforce Development (DWD) has launched a new form for the public to submit tips and potential instances of abuse of the Worker’s Compensation system by workers, employers, insurers and providers.

If, upon investigation the evidence provides a reasonable basis that Worker’s Compensation fraud occurred, DWD will refer the case to the Wisconsin Department of Justice (DOJ) for possible prosecution.

We applaud the Department’s efforts to combat Worker’s Compensation fraud.

Legislative Leaders for the 2017-2018 Legislative Session

The transition from one legislative session to the next begins with the selection of legislative leaders by the majority and minority parties in the State Senate and State Assembly.

For the 2017-2018 Legislative Session, the four “Caucus” leaders are:

Assembly Speaker: Robin Vos (R-Rochester)
Assembly Minority Leader: Peter Barca (D-Kenosha)
Senate Majority Leader: Scott Fitzgerald (R-Juneau)
Senate Minority Leader: Jennifer Shilling (D-La Crosse)

The Assembly Speaker and the Senate Majority Leader preside over the legislative and administrative activities of their respective chambers.