Tuesday, November 15, 2016

What happens to the new FLSA salary test under President Trump?

The one employment-law question I’ve been asked most since waking up last Wednesday to the reality that The Donald will be The President (aside from, “How did this happen,” and for that I direct you to John Oliver’s excellent 30-minute soliloquy of an answer from his Sunday night HBO program—warning, language NSFW) is, “Does this mean that the new FLSA salary test won’t go into effect?”

The short answer? “No, it does not mean that.”

Beginning December 1, the salary level for white-collar FLSA exemptions will increase to $913 per week, period. After all, the new regulations roll in on December 1, and Mr. Trump does not become President until 51 days later. So, even if he wants to stop them from taking effect, he’s powerless to do so, and any legislative efforts would die at the hands of the current President’s veto.

The long answer, however, is a bit more complicated.

If you take a look at Mr. Trump’s campaign website, he has an entire page dedicated to “Regulations.” And Mr. Trump does not like regulations. What did his campaign promise he’d do to regulations once becoming President?

  • Ask all Department heads to submit a list of every wasteful and unnecessary regulation which kills jobs …and eliminate them.
  • Reform the entire regulatory code to ensure that we keep jobs and wealth in America.
  • Issue a temporary moratorium on new agency regulations that are not compelled by Congress or public safety in order to give our American companies the certainty they need to reinvest in our community, get cash off of the sidelines, start hiring again, and expanding businesses. We will no longer regulate our companies and our jobs out of existence.
  • Decrease the size of our already bloated government after a thorough agency review.

If you ask any small business owner, the FLSA’s new salary test checks each of these Trumpian boxes. 

Yet, this issue was not one on which Mr. Trump focused during the campaign. In the only campaign interview I could locate that touched on this subject, he did not call for repealing the upcoming FLSA changes outright, but instead called for “a delay or a carve-out of sorts for our small business owners.” 

One possible solution? Take a look the bipartisan H.R. 5813, which would phase in the new salary test over four years, and eliminate its triennial re-indexing. If you are looking for potential models President-elect Trump might adopt, you could do a lot worse for a starting point. 

The bottom line. You cannot, and should not, hope for a reprieve from these rules at the 11th hour. The new salary test is coming, regardless of what President-elect Trump may choose to do after the fact. In other words, if you’re not prepared for these new rules, you better get prepared, and quickly, because in 16 days they become the reality of every business.