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Supreme Court draws attention with new FLSA decision

May 9, 2018
3:40 PM

Employers may find more leeway in the courts’ interpretation of the Fair Labor Standards Act (FLSA) exemptions, but it’s still too early to know. The U.S. Supreme Court issued a ruling last month in Encino Motorcars, LLC v. Navarro. While it’s important to note that the decision applies to the auto industry and is based on an industry-specific exemption, the court’s decision to reject a narrow interpretation of the statute is viewed by some as a sign that long-standing interpretations may be challenged in the future.

Bottom line: We encourage agency principals to brush up on the FLSA and make sure their job descriptions and employee classifications are consistent with the statute as currently understood. (As an aside: Most of the agency non-compliance we see has nothing to do with recent changes made to the Department of Labor rule and everything to do with misinterpretation of the existing rule.)

We highlighted this decision in our HR Bulletins (FED No. 60). As a reminder, we work with our HR consultant to monitor case law and regulations and keep a running tab of state and federal updates (as HR Bulletins) on our website.

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The FLSA requires that all employees receive overtime pay for time worked in excess of 40 hours a week, unless the employee is exempt from the requirement. Implementation of a new salary threshold for overtime exemption has ping-ponged through the courts over the past two years.

Meanwhile, employers must comply with existing FLSA requirements, particularly the often misunderstood or overlooked primary duties test.

Learn more by reviewing our do-it-yourself resources. Or, for one-on-one compliance support, contact Independent Agency Solutions, LLC, a subsidiary of IA&B.

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EDITOR’S NOTE: Due to the sensitive nature of compliance issues, a link to this article was included exclusively in the Agent Headlines emails sent to those members marked as “primary” in our database. If you are not the agency owner or do not handle HR in your agency, please forward this article to the appropriate person(s).