FLSA’s White Collar Exemptions to be Revised        July 29, 2015

On Tuesday, (June 30, 2015) the U.S. Department of Labor (DOL) issued its long-awaited proposed rule updating and revising the Fair Labor Standards Act (FLSA) regulations governing the so-called “white collar” exemptions from the FLSA’s minimum wage and overtime requirements.

The new regulations would increase the weekly salary level applicable to most of these exemptions to an estimated $970 per week ($50,440 annually) and to about $122,000 for highly compensated employees. Under the current regulations, an executive, administrative or professional employee must be paid at least $455 per week ($23,660 per year for a full-year worker). The highly compensated employee exemption sets a minimum annual compensation of at least $100,000.) The DOL also proposes automatically updating the salary level on an annual basis. Although the DOL has not revised the duties test applicable to the exemptions, it is considering doing so “to ensure that these tests fully reflect the purposes of the exemption.” DOL has invited comments as to the effectiveness of these tests, as it is “concerned” about exempt employees performing a disproportionate amount of nonexempt work. Possible revisions identified by the DOL include requiring overtime-ineligible employees to spend a specified amount of time performing their primary duty or otherwise limiting the amount of nonexempt work he or she may perform, as well as adding to the regulations additional examples for how the exemption may apply to particular occupations.

The public comment period on this rulemaking will last 60 days. In light of what should be extensive comments from multiple stakeholders, a Final Rule should be expected sometime in 2016.

Article by Adrienne Lewis, Managing Partner of The Lewis Consulting Group, LLC.  Human Resources, Operations and Business Advisory Services.

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