Like many other employers, the City of Warsaw and Warsaw Community Public Library had to increase some employees’ salaries recently to meet Fair Labor Standard Act rules that were to go into effect Thursday.
But on Tuesday, a federal court blocked the start of the rule that would have made an estimated 4 million more American workers eligible for overtime pay heading into the holiday season, according to an Associated Press story.
As a result of the ruling, the changes are unlikely to be in play before President-elect Donald Trump’s administration takes over, and he has spoken out against the President Obama-backed government regulation.
In order to stay in compliance with the Fair Labor Standard Act, the Warsaw City Council Sept. 19 approved an amendment to its 2016 salary ordinance regarding Airport Manager Nick King’s pay. King was the only city employee affected by the rules and the salary amendment raised his salary by about $5 per week to get him to that exempt level. King’s wage was $46,037, and needed to be raised to $1,826 bi-weekly.
This morning in a telephone interview, Mayor Joe Thallemer said, “It only affected one employee and it was somewhat of a nominal amount. With his merit increase in 2017, it will still be above that anyway.”
Since the city couldn’t anticipate the court blocking the rule, the city had to respond by increasing King’s salary back in September, he said.
While many people had to make salary changes for the law, Thallemer said the city was lucky in that it only had to do that for one.
King’s job as the airport manager keeps him busy working at all hours, and he’s a valued city employee, Thallemer stated.
At the Warsaw Library, the rule change affected five of 39 employees. At its Oct. 10 meeting, the WCPL Board of Trustees approved a pay hike to push those five employees’ salaries above the threshold to avoid having to pay any overtime. The additional pay totaled a little over $4,000 with the increase in salaries, FICA and PERF.
The five individuals included the facilities supervisor, IT, cataloging supervisor, circulation supervisor and administrative assistant.
Library Director Ann Zydek this morning said, “At this point, it has been passed by the board as of Oct. 10. On Nov. 26, it took effect.”
During the library board’s Dec. 12 meeting, Zydek said she will mention the federal block of the FLSA rule when the board discusses the overview of the 2017 salaries. The ultimate decision on the employees’ salaries will be up to the board.
She said she received an email from the Indiana State Library legal counsel explaining “it means the library can continue to follow the existing FLSA rules. It doesn’t mean you can’t.”
The U.S. District Court in Eastern Texas granted the nationwide preliminary injunction, saying the Department of Labor’s rule exceeds the authority the agency was delegated to Congress, the AP reported.
The regulation sought to shrink the so-called “white collar exemption” that allows employers to skip overtime pay for salaried administrative or professional workers who make more than about $23,660 per year. Under the rule, those workers would have been eligible for overtime pay as long as they made less than about $47,500 a year, and the threshold would readjust every three years to reflect changes in average wages.
