The US Department of Labor (DOL) mandated a change in the pay threshold for exemption from overtime under the Fair Labor Standards Act (FLSA) which was required to be implemented by employers on December 1, 2016.
The City of Houston's pay period that included the DOL's December 1, 2016, deadline, began on November 9, 2016. In order to comply with the DOL rule by its implementation deadline, on November 9, 2016, City Council approved ordinance 2016-853 to change the civilian pay grade structure for grades 20, 21, and 22. The ranges were changed as follows:
a. Minimum grade 22 increased from $1,776 to $1,826.
b. Minimum grade 21 increased from $1,690 to $1,826.
c. Minimum grade 20 increased from $1,609 to $1,826.
The maximums of the three grades were also changed.
Since that time, the new DOL regulations, which were to take effect December 1, 2016, have been placed on hold by a federal court's injunction. The DOL has opposed the injunction. At this time HR cannot anticipate when, if ever, the City may be required to implement the regulation. Accordingly, HR recommends returning the City's pay ranges for grades 20, 21 and 22 to their original ranges, effective immediately. If/when the City is required to comply with the DOL, HR will request further action by Council.
If Council chooses not to adopt this proposed ordinance, then Ordinance 2016-853 will remain in effect with the increased minimums, regardless of subsequent DOL rule changes.