Nearly a thousand parties have already submitted comments on the Department of Labor’s (DOL) proposed changes. Now is your chance to help shape the final rules, and we can help.
The DOL published the Notice of Proposed Rule Making in the Federal Register on July 6, starting the 60-day notice and comment period on the proposed changes. Written comments are due on or before September 4, 2015 and employers significantly impacted by the changes should strongly consider submitting comments.
Proposed changes include:
- increasing the current minimum salary requirement for the executive, administrative, professional and computer employee exemptions from US$455 per week (US$23,660 per year) to US$970 per week (US$50,440 per year), with automatic increases
- increasing the threshold for exemption as a “highly compensated employee” from US$100,000 to US$122,148
1 Methodology for Annual Updating of Minimum Salary Levels
There are two proposed methodologies for consideration:
- Keep 40th and 90th percentiles of earnings for full-time salaried workers
- Adjust the minimum salary and compensation amounts based on changes in inflation as measured by the Consumer Price Index
2. Changes to “Duties” Tests?
While the proposed rule does not contain any changes to the current standard duties tests, the DOL is also seeking comments on whether changes to “the duties” tests are necessary. Our position is that the DOL should not adopt a time-based task test similar to that of California. If any changes are made in this area they should be to relax the duties tests once a certain minimum salary threshold is reached. We also believe that the DOL should use this opportunity to set forth more specific examples of occupations likely to meet or not meet the duties tests under the white collar exemptions.
3. Inclusion of Bonus Payments Toward Salary Requirement
While the proposed rules do not include a provision providing for inclusion of certain guaranteed bonuses toward the minimum salary amount, the DOL is specifically asking for input on whether such should be provided in the final rule. We believe that employers should be entitled to count any at least quarterly bonuses paid to the executive – whether discretionary or guaranteed – toward the minimum salary requirement.
You can read the proposed rule online. If you are interested in providing any comments on the rule, you can submit them on the Regulations.gov website. Alternatively, you can send an email with your comments to FLSAcomments@squirepb.com and one of our team members will submit them for you.
We are closely monitoring all relevant developments related to the proposed regulations. We encourage all employers to have their voice heard concerning how these regulations will impact you and your business.