We all are familiar with The Fair Labor Standards Act which requires employers to pay employees overtime pay for hours worked over 40 in a workweek.
Just like any rule, there are exceptions. The exceptions that the Department of Labor are reviewing to change are the so-called “white collar jobs.” Those considered in that group include positions executive, administrative or professional in nature and the job must satisfy two tests: (1) the duties test, and (2) the salary test.
The DOL uses the duties test to specify certain types of tasks an employee must perform to pass the test and fit under the exemption. If the employee’s job tasks do not match up to what the DOL specifies, then the employee must be paid overtime.
The second test, the salary test, determines if the employee will be exempt from the overtime rules based on the amount of their salary. Currently, the DOL salary threshold is $23,600 per year. Anyone that makes less and fits the duties test will be exempt from overtime requirements.
In 2016, the Obama Administration under the DOL, issued a new rule that increased the salary threshold for the exemption from $23,600 to $47,474 per year.
There was a lawsuit filed over the issue in the U.S. District Court for the Eastern District of Texas and the court ultimately enjoined the rule from moving forward until after a new proposed rulemaking period.
In July 2017, the DOL issued a Request for Information. An RFI is one of many possible tools used by an agency to help it develop a proposed rule. Agencies generally use RFIs when they want public input on whether a new rule or changes to an existing rule are needed, and comments on what course the agency should take should it decide to move forward.
The DOL is specifically seeking feedback from companies related to the salary level test, the duties test, inclusion of nondiscretionary bonuses and incentive payments to satisfy a portion of the salary level, the salary test for highly compensated employees, and automatic updating of the salary level tests.
The DOL is now holding listening sessions where companies can come and comment publically. Catherine Treadwell, ASA’s director of government relations, attended the listening session on Oct. 17 in D.C.
If you or your company would like to let the DOL know how these changes could affect you, please email Treadwell at email@example.com.
As the DOL is gathering more information and comments, the Notice of Proposed Rulemaking will most likely be put out in 2019. However, it is said that the salary threshold will most likely be raised between $34,000 and $36,000.