On April 2, the U.S. Supreme Court held, in Encino Motorcars, LLC v. Navarro, that service advisors at automobile dealerships are exempt from the overtime requirements of the Fair Labor Standards Act. The Court was divided 5-4 on this issue, with Justice Thomas writing the opinion on behalf of the majority and Justice Ginsburg writing the opinion on behalf of the 4 dissenting Justices. The Court reversed a Ninth Circuit Court of Appeals' decision, which found that service advisors were non-exempt employees who were eligible for overtime pay.
On January 5, 2018, the U.S. Department of Labor’s Wage and Hour Division reissued 17 opinion letters that were withdrawn in 2009, shortly after President Obama began his first term in office. The USDOL under the Obama administration withdrew the 17 opinion letters on March 2, 2009, stating that they were being withdrawn “for further consideration” and that it would “provide a further response in the near future.” However, it does not appear that the USDOL actually revisited any of the opinion letters that had been withdrawn, so the USDOL under the Trump administration has now reissued those opinion letters and has renumbered them as FLSA2018-1 through FLSA2018-17.
Although the minimum wage rate under the Fair Labor Standards Act remains $7.25 per hour and the U.S. Department of Labor’s efforts to raise the minimum salary to qualify for a white-collar exemption under federal law have stalled, employers in New York should be aware that the state minimum wage rate and the state salary threshold to qualify for the executive and administrative exemptions will increase effective December 31, 2017.
The increases to the state minimum wage effective December 31, 2017, are as follows:
Employers outside of New York City, Nassau, Suffolk, and Westchester counties: $10.40 per hour
Employers in Nassau, Suffolk, and Westchester counties: $11.00 per hour
Employers in New York City with 10 or fewer employees: $12.00 per hour
Employers in New York City with 11 or more employees: $13.00 per hour
Fast food employees will be entitled to an even higher wage rate effective December 31, 2017, as follows:
Fast food employees outside of New York City: $11.75 per hour
Fast food employees in New York City: $13.50 per hour
The salary threshold to qualify for the executive and administrative exemptions effective December 31, 2017, are as follows:
Employers outside of New York City, Nassau, Suffolk, and Westchester counties: $780.00 per week
Employers in Nassau, Suffolk, and Westchester counties: $825.00 per week
Employers in New York City with 10 or fewer employees: $900.00 per week
Employers in New York City with 11 or more employees: $975.00 per week
New York does not set a salary threshold to qualify for the professional exemption, so employees must meet the current federal salary threshold of $455.00 per week to qualify for the professional exemption. For all of the white-collar exemptions, employees must also meet the applicable duties requirements.
A chart summarizing the minimum wage rates, tip credits, uniform maintenance allowances, meal and lodging credits, and exempt salary thresholds under the Miscellaneous Industries Wage Order can be found here. A chart summarizing this same information under the Hospitality Industry Wage Order can be found here.
Employers in New York will be subject to new “call-in” pay and scheduling requirements under recently-proposed state Regulations. Governor Andrew Cuomo recently announced these proposed Regulations, which the New York State Department of Labor (“DOL”) will reportedly publish in the State Register on November 22, 2017.
New York regulators have recently focused their enforcement sights on the so-called “just-in-time” or “on-demand” scheduling of workers. According to Governor Cuomo, this practice entails the scheduling or cancelling of a worker’s shift with little or no advance notice. At the Governor’s direction, the DOL recently held hearings across the state on this issue, which then led to issuance of the proposed Regulations.
If enacted, the proposed Regulations would amend New York’s catch-all “Miscellaneous Industries” minimum wage order, including those portions applicable to non-exempt “nonprofitmaking institutions” across the state.
Call-In Pay Under Current New York Law
Under the Miscellaneous Industries minimum wage order, non-exempt employees who report to work are currently entitled to call-in pay equal to the lesser of four hours of pay or pay for the number of hours in the regularly-scheduled shift, at the state minimum wage rate. Notably, the DOL has interpreted this provision, such that it only effectively applies to non-exempt workers who earn at or very near the state minimum wage. In this regard, the DOL previously stated in Opinion Letter No. RO-09-0133, dated December 2, 2009: “[I]f the amount paid to an employee for the workweek exceeds the minimum and overtime rate for the number of hours worked and the minimum wage rate for any call-in pay owed, no additional payment for call-in pay is required during that workweek.” (emphasis added).
In other words, under DOL’s interpretation, New York employers could potentially apply an “offset” — for amounts paid to workers above the state minimum wage and overtime rates during the same workweek — against any “call-in” pay otherwise due to workers.
Additionally, under current law, employers are generally free to schedule, and, when necessary, cancel shifts before employees report for work, without incurring any additional payment obligation.
Call-In Pay Under the Newly-Proposed DOL Regulations
The recently-proposed Regulations would create a number of new circumstances when non-exempt employees will be eligible to receive “call-in” pay, including the following:
Employees who report to work for a shift that was not scheduled at least 14 days in advance will be entitled to an additional two hours of call-in pay;
Employees whose shifts are cancelled within 72 hours of the start of that shift will be entitled to at least four hours of call-in pay;
Employees who are required to be on-call and available to report to work for any shift will be entitled to at least four hours of call-in pay; and
Employees who are required to be in contact with their employer, within 72 hours of the start of a shift, to confirm whether or not to report to work for that shift will be entitled to four hours of call-in pay.
Under the Regulations, the above call-in pay must be calculated at the current state minimum wage rate (which now varies by location and workforce size) without any allowances, and employees must receive their “regular rate” for their actual time of attendance. However, these new requirements will not apply to otherwise covered employees whose weekly wages exceed 40 times the applicable state minimum wage.
The proposed Regulations will also replace current “call-in” pay requirements with the following:
Employees who report to work for any shift will be entitled to at least four hours of call-in pay.
Notably, the proposed Regulations state: “Call-in pay shall not be offset by the required use of leave time, or by payments in excess of those required under” the applicable minimum wage order. Although this provision is not entirely clear on its face, conceivably, it was drafted with the intent of curtailing application of the above-referenced weekly “offset” provided under prior DOL interpretation.
Finally, the proposed Regulations state that the above requirements will not apply to certain employees “who are covered by a valid collective bargaining agreement that expressly provides for call-in pay.” Further, the requirements may not apply in certain other circumstances, such as when a business cannot begin or continue operations due to a state of emergency or other “Act of God” beyond its control.
Employers should also be mindful that New York City recently passed a similar law that will become effective on November 26, 2017. This other local law places somewhat similar requirements on retail employers, and also places additional requirements on certain fast food establishments.
According to DOL, the proposed Regulations will be subject to a 45-day comment period after official publishing. We will update this article with any further developments, and will be announcing a free webinar on the proposed Regulations in the coming days.
If you have any questions about this issue in the meantime, please contact Andrew D. Bobrek, any of the attorneys in our Labor and Employment Law Practice, or the attorney in the firm with whom you are regularly in contact.
Author’s Note: A special thanks to Richard White, who assisted in drafting this article.
Today, July 26, 2017, the U.S. Department of Labor (“USDOL”) published a Request for Information (“RFI”) in the Federal Register regarding the regulations defining the Fair Labor Standards Act (“FLSA”) exemptions for executive, administrative, professional, outside sales, and computer employees. Public comments can be submitted by any of the methods set forth in the RFI by September 25, 2017.
Before summarizing some of the subjects on which the USDOL is soliciting input from the public, here is a quick review of the history of the USDOL’s efforts to revise its FLSA white collar exemption regulations. As you certainly recall (who can forget?), the USDOL issued final regulations last year increasing the salary threshold from $455.00 per week to $913.00 per week in order to qualify for the executive, administrative, professional, and computer employee exemptions. Those regulations were supposed become effective December 1, 2016. However, shortly before the effective date, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction prohibiting the USDOL from implementing its revised regulations based on its holding that Congress intended the white collar exemptions to be defined with regard to duties — not with regard to a minimum salary level. The USDOL appealed to the Fifth Circuit Court of Appeals. In its recent reply brief, the USDOL stated that it no longer wishes to argue in support of the $913.00 salary level, but instead only intends to argue that it has the authority to establish a salary level test for the white collar exemptions. The USDOL informed the Fifth Circuit that it intends to undertake further rulemaking to determine what the appropriate salary level should be if the Court holds that it has the authority to establish a minimum salary level.
The USDOL’s publication of this RFI is a preliminary step toward its issuance of a notice of proposed rulemaking. There are many questions posed by the USDOL in its RFI. Some noteworthy questions are:
Would updating the 2004 salary level ($455.00 per week) for inflation be an appropriate basis for setting the standard salary level and, if so, what measure of inflation should be used?
Should the regulations contain multiple standard salary levels and, if so, how should these levels be set: by size of employer, census region, census division, state, metropolitan statistical area, or some other method?
Should the regulations contain different salary levels for the executive, administrative, and professional exemptions?
To what extent did employers, in anticipation of the implementation of the $913.00 per week salary level, increase salaries of exempt employees to retain their exempt status?
To what extent did employers intend to convert exempt employees to non-exempt status in anticipation of the implementation of the $913.00 per week salary level, but change their implicit hourly rates so that the total amount paid would remain the same even with overtime?
Would a duties-only test for the white collar exemptions be preferable?
Should the salary levels be automatically updated on a periodic basis and, if so, what mechanism and what time period should be used for the automatic updates?
It is a positive development for employers that the USDOL no longer intends to defend the increase in the minimum salary level to $913.00 per week in order to qualify for the executive, administrative, professional, and computer employee exemptions. However, the USDOL will likely propose some changes to its white collar exemption regulations upon receipt of input from the public with respect to its RFI and after the Fifth Circuit issues its decision. Those proposed changes could include an increase in the minimum salary level, but such a proposed increase will almost certainly not be as drastic as the one that nearly went into effect last year.
There are few things more confusing to employers than the nitty-gritty rules of what is and is not compensable time for non-exempt employees under the Fair Labor Standards Act (FLSA). There are also few things more costly to employers than when a mistake is made and a non-exempt employee is not paid for time he/she should have been paid for. With the continuous onslaught of FLSA lawsuits being filed every day, it is important for employers to be familiar with the rules that affect their obligation to pay non-exempt employees. Here are some answers to common questions that are often asked with regard to the compensability of time non-exempt employees spend traveling in connection with work. 1. Do employees have to be paid for the time they spend commuting to work? Ordinarily, travel from home to an employee’s regular place of work, or from work to home, does not count as “time worked.” Once an employee’s work day ends, the time the employee spends traveling from his/her last job site to home is considered ordinary commuting time for which the employee will generally not be owed wages. If an employee has a regular work site, but he/she is required to report to a different work site on occasion, the time spent traveling from home to the different job site (or from the job site back home at the end of the work day) is also not compensable, as long as the different job site is within the same general locality as where the employee regularly works. For employees who do not have regular work sites and instead travel to different work sites each day, all home-to-work and work-to-home travel time is generally considered non-compensable commuting time, even if the distances traveled are long and the time spent commuting is substantial. 2. What if the employee uses a company car -- do you have to pay for the employee’s commuting time then? Generally, no. An employee’s home-to-work and work-to-home travel in a company-owned vehicle is not generally considered to be hours worked, as long as: (1) it is a vehicle of a type normally used for commuting; (2) the employee is able to use his/her normal route for the commute; (3) the employee does not incur any additional costs using the company vehicle; (4) the home-to-work and work-to-home travel is within the company’s normal commuting area; and (5) the use of the vehicle is subject to an agreement between the company and the employee. 3. Do you have to pay an employee for travel during the work day? Once an employee arrives at his/her regular work site and begins work for the day, the employee’s travel during the course of the work day is compensable. For example, the time the employee spends traveling between two work sites will count as “time worked,” just as will the time an employee spends traveling between other places for work-related reasons during his/her work day. Such travel time therefore is compensable as work time for both minimum wage and overtime purposes. 4. Do you have to pay an employee for time spent traveling on an overnight trip? Whether or not travel in connection with overnight trips is compensable work time generally depends on when the travel occurs. If an employee goes on an overnight trip for work and the travel occurs outside of the employee’s regularly scheduled work hours, generally the travel time will not be deemed work time. If, however, the time the employee spends traveling is during his/her regular work hours, that travel time will generally count as "time worked" -- even if the travel occurs on a day that the employee would not ordinarily have worked! For example, if an employee regularly works 9:00 a.m. to 5:00 p.m. Monday to Friday, but travels for work from 4:00 p.m. to 10:00 p.m. on Sunday, the employee would have to be paid for the hour from 4:00 p.m. to 5:00 p.m. because that time overlaps with the hours during the days that the employee regularly works, even though Sunday is not a regular work day for that employee. The hours from 5:00 to 10:00 p.m. need not be paid because they are outside the hours that the employee regularly works. This rule may seem counterintuitive, but it what is currently required under the law. 5. Does it matter whether the employee uses public transportation or drives himself/herself for the overnight work trip? Yes. If an employee uses public transportation to get to the distant location, whether or not the travel time is compensable will be determined as set forth in Question 4 above. If the employee is not offered the option of using public transportation and is required to drive himself or herself, the entire time spent driving is compensable. However, if an employee is offered the option of using public transportation and instead chooses to drive himself or herself to the distant location, the employer can count as compensable “work time” either the actual time spent driving or the hours that overlap with the employee’s regular work hours as set forth in Question 4 above. Take the following scenario, for example. Employee A regularly works Monday to Friday from 9:00 a.m. to 5:00 p.m. and has to travel from New York City to Syracuse for an overnight trip. The employer offers the employee the option of air travel, which would require the employee to take a flight departing New York City at 4:00 p.m. on Sunday and arriving in Syracuse at 5:05 p.m. that same day. The employee instead opts to drive the 5 hours from New York City very early on Monday morning instead of flying to Syracuse on Sunday. In this scenario, the employer has the option of paying the employee for either the one hour from 4:00 p.m. to 5:00 p.m. on Sunday since it overlaps with the employee’s regular work hours of 9:00 a.m. to 5:00 p.m., or the five hours the employee spends driving on Monday morning before his/her regular workday would otherwise begin. 6. Do you have to pay an employee for the entire time he/she is away on an overnight work trip? If, while on an overnight trip for work, a non-exempt employee performs work outside of his/her regularly scheduled work hours, the time the employee spends doing that work will count as “time worked” and has to be compensated just as it would had the employee worked that time under ordinary circumstances. But time that the employee spends idly or on personal activities will not count as “time worked” and will not have to be compensated. 7. What about one-day work trips to a different city that do not require an overnight stay -- do you have to pay an employee for the entire day? Different rules apply when an employee usually works in a single location, but goes on a special one-day work trip to a different city than where he/she regularly works. In that circumstance, if the employee uses public transportation to get to the destination city, the employee does not have to be paid for time he/she spends commuting from home to the train station or airport (whichever applies), because that is considered to be the employee’s ordinary commuting time. But the employee does have to be paid for all of the time he/she spends at the airport or train station (yes, flight delays and the like will be deemed compensable), and actually traveling between the train station or airport to the other city, regardless of whether or not the travel occurs during the employee’s regular work hours. If the employee instead drives himself/herself to the destination city instead of taking public transportation, the time spent driving would be compensable as work time. If, however, the driving employee first drives to his/her regular work location before or after driving to the destination city, that home-to-work travel to the regular work location would be considered the employee’s ordinary commute and therefore non-compensable. Regardless of whether public transportation is used or the employee drives to the destination city for a one-day work trip, the time the employee spends for meal breaks (assuming he/she is not working during those breaks) and any idle time (i.e., time spent neither working nor traveling) outside of his/her regular work hours is not compensable and does not count as “time worked.” 8. Are these rules the same under the FLSA and any state-specific wage and hour laws? The wage and hour rules are not necessarily the same from state to state, so it is always important to be mindful of any state-specific laws that could affect an employer’s obligation to pay its non-exempt employees. For employers with operations in New York State, the New York State Department of Labor has indicated that it interprets the relevant New York Labor Law provisions and accompanying state regulations “in line” with the FLSA’s “travel time” rules, but that is not a guarantee that the state and federal laws will always be in congruity. It is always possible that the New York State Department of Labor could take an inconsistent position on a particular “travel time” issue, so it is important to always double check and not just assume that the federal rules apply.
In a decision issued yesterday, the New York State Industrial Board of Appeals (IBA) revoked the regulations regarding payment of wages by debit card and direct deposit. While the full decision is available here, the upshot is that the IBA concluded that the Commissioner exceeded his “rulemaking authority and encroached upon the jurisdiction of the banking and financial services regulators.”
Accordingly, the regulations governing the payment of wages by debit card and direct deposit, which were set to go into effect on March 7th, are revoked. Employers need not act to come into compliance with those regulations.
An appeal is possible. Stay tuned.
Pursuant to new regulations that take effect on March 7, 2017, New York employers will be required to satisfy certain notice requirements and obtain employees' informed consent before paying wages by debit card or direct deposit. (Additional information concerning those regulations can be found here.) In connection with those regulations, this week the New York State Department of Labor posted model templates for written notice and consent for public comment and feedback.
The notice and consent for payroll debit cards can be found here.
The notice and consent for direct deposit can be found here.
Comments and feedback can be submitted to regulations@labor.ny.gov through February 10, 2017. The Department indicates that after making any changes from such comment and feedback, it will post updated templates prior to the March 7 effective date of the rule, along with translations into additional languages specified during the rulemaking process.
As expected, this morning, the New York State Department of Labor published its final rule increasing the salary threshold applicable to exempt executive and administrative employees in New York State. While the ultimate fate of the USDOL’s regulations remains unclear, New York employers now know that the salary threshold applicable to exempt executive and administrative employees will increase effective December 31st. As previously reported, under New York’s Labor Law, the salary threshold for executive and administrative employees (NY law does not set a salary threshold for professional employees and thus the federal salary of $455 applies) is currently $675 per week -- 75 times the current minimum wage of $9.00 per hour. With the minimum wage set to gradually increase in coming years (at different rates depending on geography), the New York State Department of Labor has implemented corresponding increases in the applicable salary threshold. The first of these increases will take effect in just three days. Specifically, the increases to New York's salary threshold for executive and administrative employees are as follows: Employers Outside of New York City, Nassau, Suffolk, and Westchester Counties
$727.50 per week on and after 12/31/16;
$780.00 per week on and after 12/31/17;
$832.50 per week on and after 12/31/18;
$885.00 per week on and after 12/31/19;
$937.50 per week on and after 12/31/20
Employers in New York City"Large" employers (11 or more employees)
$825.00 per week on and after 12/31/16;
$975.00 per week on and after 12/31/17;
$1,125.00 per week on and after 12/31/18
"Small" employers (10 or fewer employees)
$787.50 per week on and after 12/31/16;
$900.00 per week on and after 12/31/17;
$1,012.50 per week on and after 12/31/18;
$1,125.00 per week on and after 12/31/19
Employers in Nassau, Suffolk, and Westchester Counties
$750.00 per week on and after 12/31/16;
$825.00 per week on and after 12/31/17;
$900.00 per week on and after 12/31/18;
$975.00 per week on and after 12/31/19;
$1,050.00 per week on and after 12/31/20
$1,125.00 per week on and after 12/31/21
A chart summarizing these thresholds is available on the NYS DOL website. What does this mean? It means that if you have any exempt executive or administrative employees who are currently paid less than the applicable salary threshold set forth above, you must increase their salary to at or above that threshold or reclassify them as nonexempt. But fear not -- you have three days. What a perfect way to end the year -- a significant change imposed on New York employers with virtually no notice. Happy New Year everyone!
Yesterday, the U.S. Court of Appeals for the Fifth Circuit granted the USDOL's request to expedite its appeal from the preliminary injunction order issued by the U.S. District Court for the Eastern District of Texas, preventing the new white collar exemption regulations from being implemented. Under the Fifth Circuit's schedule for the appeal, the USDOL is required to file its appeal brief by December 16, 2016. The responding brief of the 21 states that obtained the preliminary injunction is due by January 17, 2017. The USDOL's reply brief is due by January 31, 2017. Amicus briefs in support of the USDOL are due by December 23, 2016, and amicus briefs in support of the 21 states are due by January 24, 2017. The oral argument before a panel of Fifth Circuit judges will be scheduled on the first available date after the close of briefing, and the Court will issue an expedited ruling on the appeal after oral argument is conducted.
Although the Fifth Circuit agreed to expedite the appeal, the briefing schedule issued by the Court confirms that the appeal will still not be decided before Donald Trump is inaugurated as the next President of the United States on January 20, 2017. Trump's announced intent to nominate Andrew Puzder as his Secretary of Labor sends a fairly clear signal that the Trump Administration will not support the new regulations as they are currently written and may even withdraw the pending appeal before a decision is issued by the Court. Puzder is the CEO of a chain of fast-food restaurants who has been a vocal opponent of the USDOL's increase to the minimum salary to qualify for the white collar overtime exemptions. On May 18, 2016, the same day that the USDOL issued its final regulations, Puzder wrote an opinion piece for Forbes soundly criticizing the regulations as counterproductive to the goal of increasing the wages of the middle class. In that article, Puzder wrote: "This new rule will simply add to the extensive regulatory maze the Obama Administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere. In practice, this means reduced opportunities, bonuses, benefits, perks and promotions."
It remains likely that the New York increases in the minimum salary levels to qualify for the executive and administrative exemptions will be adopted. The 45-day comment period after the issuance of the proposed New York State Department of Labor regulations recently ended, and it is expected that the regulations will be adopted as final before the end of the year.
We will continue to provide updates as further developments occur.
Today, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction preventing the U.S. Department of Labor from implementing its regulations revising the white collar exemptions. Therefore, the increase in the minimum salary level to $913.00 per week that was expected to go into effect on December 1 will not occur on that date.
In granting the injunction, the Court held that Congress intended the executive, administrative, and professional exemptions to be based on an employee's duties -- not on an employee's salary level. Specifically, the Court stated: "After reading the plain meanings together with the statute, it is clear Congress intended the EAP [executive, administrative, professional] exemption to apply to employees doing actual executive, administrative, and professional duties. In other words, Congress defined the EAP exemption with regard to duties, which does not include a minimum salary level." Although the USDOL has imposed a minimum salary level requirement to qualify for the white collar exemptions since the 1940s, the Court nevertheless determined that the increase in the minimum salary level from $455.00 per week to $913.00 per week was so large that "it supplants the duties test." The Court stated: "If Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change."
So, what does this mean for the future of these regulations? Although this is only a preliminary injunction that prevents the implementation of the regulations until a final determination is made, this could very well be a permanent end to the regulations. A final determination is unlikely to be issued before the inauguration of President Trump, and it seems less likely that the USDOL under the Trump administration will be inclined to continue to vigorously defend the regulations in this litigation. A more likely outcome is that the USDOL may rescind and reissue the regulations with a less drastic salary increase, or perhaps even not reissue the regulations at all.
This development leaves many employers wondering what to do about the employees who have already been told that they will be reclassified from exempt status to non-exempt status beginning next week and the employees who have been told that they will receive salary increases beginning next week in order to maintain their exempt status. The employees who have been told that they will be reclassified from exempt to non-exempt status can certainly be told at this point that they will remain exempt employees (assuming, of course, that their duties continue to qualify them for one of the white collar exemptions). In addition, from a legal standpoint, nothing would preclude an employer from rescinding the salary increases that were scheduled to go into effect next week for employees who were told that they would receive a salary increase to maintain their exempt status (unless the employer has entered into an employment contract that binds the employer to providing the salary increase). Obviously, from a human resources standpoint, this will require clear and prompt communication regarding the reason why the salary increase is being rescinded.
Employers in New York should also keep in mind that the New York State Department of Labor has proposed a gradual increase to the minimum salary levels to qualify for the executive and administrative exemptions. If these proposed regulations are adopted, the first salary increase will occur on December 31, 2016. Employers outside of New York City, Nassau, Suffolk, and Westchester Counties will be required to pay a minimum salary of $727.50 per week to executive and administrative employees. Employers in New York City who employ 11 or more employees will be required to pay a minimum salary of $825.00 per week to executive and administrative employees. Employers in New York City who employ 10 or fewer employees will be required to pay a minimum salary of $787.50 per week to executive and administrative employees. Employers in Nassau, Suffolk, and Westchester Counties will be required to pay a minimum salary of $750.00 per week to executive and administrative employees. These amounts will increase each year. There is still no minimum salary under New York law to qualify for the professional exemption even under the new proposed regulations. We will provide an update regarding whether these proposed regulations become final regulations.
As we previously reported, 21 states filed a lawsuit on September 20 against the U.S. Department of Labor in the U.S. District Court for the Eastern District of Texas, challenging the USDOL’s revisions to the white collar exemptions under the Fair Labor Standards Act. On that same day, several business groups filed their own lawsuit in the same Court, also challenging the USDOL's white collar exemption regulations. As we quickly approach the effective date of the new regulations (December 1), many employers are wondering: what is the status of those lawsuits and how do those lawsuits affect our plans to communicate with our employees about changes that will be made? The short answer to the first question -- the status of the lawsuits -- is that the Court has not issued a decision yet. On October 12, the 21 states filed a motion for a preliminary injunction, and on October 14, the business groups filed a motion for summary judgment. On October 19, because of the similarities in the allegations and the common underlying purpose of the two complaints, the Court consolidated the two cases. This morning, November 16, the court held oral argument with respect to the states' motion for a preliminary injunction. The U.S. District Judge, Amos L. Mazzant, III, stated at the end of oral argument that the Court hopes that a ruling on the motion for a preliminary injunction will be issued on Tuesday, November 22. The USDOL's deadline to file a response to the business groups' motion for summary judgment is November 18, and the business groups will have until November 21 to file a reply. So, a decision on the motion for summary judgment is also not expected at least until November 22 at the earliest. The answer to the second question -- what effect the lawsuits will have on a New York employer's plans to communicate changes to its employees -- is that it may not be feasible for employers to wait and see whether the Court issues an injunction before communicating with their employees. Employers will need to comply with the new regulations (assuming there is no injunction) effective at the beginning of the work week that encompasses December 1. For employers that have Monday through Sunday work weeks, that date will be Monday, November 28 -- right after Thanksgiving weekend. Therefore, employers that want to provide their employees with as much advance notice as possible may find it difficult to wait and see whether the Court issues a decision on November 22 before letting their employees know that they will be converted from exempt to non-exempt status effective November 28. Employers may want to consider including some language in their communications to employees to let them know that the changes in classification will occur unless there are developments prior to the effective date of the changes that either delay or prevent the new regulations from being implemented. However, even in the absence of such language, nothing would preclude an employer from restoring the status quo if a preliminary injunction is issued by the Court.
