The 60-day comment period for the proposed changes to the Fair Labor Standards Act (“FLSA“) governing what has been commonly referred to as the “white collar” exemption is closed.
As a reminder, the FLSA guarantees a minimum wage and overtime pay at a rate at least one and one-half times the worker’s regular rate for hours worked (beyond 40 per week). These protections covered most workers, however, the FLSA provides a number of exceptions allowing employers to avoid the time and a half rule. On the President’s direction, the Department of Labor (“Department“) proposed an update and revision to those above FLSA regulations, effectively narrowing the minimum wage and overtime pay exception for executive, administrative, professional, outside sales, and computer employees.
Under current regulation, employees who meet certain minimum tests related to their primary job duties, including being paid on a salary basis, were exempt from the time and a half requirement, and therefore fell within the white-collar exception. Generally, the salary level required for exemption is at $455 a week ($23,660 for a full-year worker), this was last updated in 2004. Equivalent to approximately $30,000 in 2015 dollars.
As stated by the Department, the new proposed rules are designed to “update the salary level to ensure that the FLSA’s intended overtime protections are fully implemented, and to simplify the identification of nonexempt employees, thus making the EAP exemption easier for employers and workers to understand.” Further, the Department proposed a formulaic and automatic update to the salary requirement so that the rule would follow a natural trend avoiding lengthy legislation changes.
The closed comment period garnered nearly 5,000 comments per day over the 60-day window. Unfortunately for those who must read the comments, many commentaries are doomsday-writers who may have not read the proposal, however there are others that appear well drafted and clearly show their support or objection to the proposals. Ultimately the proposed changes do not appear dramatic, and with authorization or not, dialogue between both sides is positive and necessary.
