by Robert J. Britz (Summer 2017)
An injunction issued by a federal district court has suspended the planned implementation of new regulations that would impact employers, including fire protection districts, as to application of Fair Labor Standards Act (FLSA) overtime exemptions.
As required by the FLSA, all employers are required to pay overtime to employees who work more than 40 hours in a week. Section 207 of the FLSA lists who may be exempt from the 40-hour overtime rule, although not exempt from paying overtime. The Section that the fire service is most familiar with, Section 207(k) (29 U.S.C. § 209 (k)), provides that overtime is required to be paid only for hours worked over those hours specified in the FLSA applicable to the work period assigned by the employer. For instance, if the District has selected a 28-day work period, overtime is required to be paid to the employee after more than 212 hours in the 28-day period.
Section 203(y) of the FLSA defines “employees in fire protection activities”, and it states as follows:
“employee in fire protection activities means an employee, including a firefighter, paramedic, emergency medical technician, rescue worker, ambulance personnel, or other hazardous materials worker, who (1) is trained in fire suppression, has the legal authority and responsibility to engage in fire suppression, and is employed by a fire department of a municipality, county, fire district or state, and (2) is engaged in the prevention, control, and extinguishment of fires or response to emergency medical situations where life, property, or the environment is at risk.” (29 U.S.C. § 203 (y))
Many courts have interpreted that section of the FLSA in determining whether or not a given employee qualifies as a fire protection employee, and otherwise meets the standards of the § 207(y) definition. Such employees may sometimes include EMTs, paramedics, administrative staff, fire marshal, arson investigator, administrator, provided they otherwise satisfy the requirements of the above definition.
Unless otherwise excepted, employers are required to pay overtime to their employees who work more than 40 hours per week. One of the exceptions for 40- hour work week employees are those who qualify as an executive, administrative or professional employee, as defined by the FLSA regulations. The FLSA includes three requirements to qualify as an exempt executive employee; two requirements to qualify as an administrative employee; and two requirements to qualify as a professional employee. In addition to those requirements, there is a salary threshold requirement.
The U.S. Department of Labor (DOL) adopted regulations that were to take effect December 1, 2016, that increased the salary threshold from $23,660 to $47,476 annually. As a result of the regulation, many employers who had not been paying qualifying executive, administrative or professional employees overtime after 40 hours per week, may now be subject to having to pay overtime to those employees if said employees earn less than $47,476 annually. Many employers, in relying on the new regulations have implemented new salary policies.
Shortly before the new salary threshold was about to take effect, a lawsuit was filed in the United States District Court in Texas entitled “State of Nevada v. United States Department of Labor, 4:16-CV-00731 (Filed 9/20/2016).
On November 22, 2016, The U.S. District Court entered a preliminary injunction which enjoins the DOL from implementing the new regulations nationwide. The fact that an injunction was issued does not necessarily mean that the plaintiffs will be successful on the underlying merits of the case. It merely means that the court found:
1. A substantial likelihood of success on the underlying merits of the case;
2. A substantial threat that the plaintiffs will suffer irreparable harm if the injunction is not granted;
3. That prospective injury outweighs any damage that the injunction might case the defendant; and
4. That the injunction will not disserve the public interest.
In granting the injunction the court found that the plaintiffs had satisfied the standards particularly, that the plaintiffs had demonstrated a substantial likelihood of success on the merits of underlying lawsuit. The court found that Section 213(a)(1) of the FLSA, which addresses the exemption for executive, administrative and professional employees, did not establish a salary threshold. Correspondingly, the DOL therefore lacked the statutory authority to establish such a threshold in its rules.
The result of the injunction left employers who have employees employed in bona fide executive, administrative, or professional capacities in a quandary as to whether to commence paying said employees overtime who earn less than $47,476 annually. The injunction, for now, enjoins the DOL from enforcing its new regulation. If in the underlying case the court finds that the regulation is enforceable, employers will be right back where they were at before the injunction was issued and the new regulations will presumably take immediate effect.