This past July, the U.S. Department of Labor ("DOL") issued proposed new regulations directed at significantly increasing the threshold salary level required to be an exempt executive, administrative, or professional employee under the Fair Labor Standards Act (“FLSA”). The proposed regulations would increase the salary level required for most white collar employees to retain their exempt status from $455 to $970 per week.
On September 4, 2015, the 60-day public comment period on the proposed new white collar regulations closed with nearly 250,000 comments filed with the DOL—which illustrates the sharp divide that exists as to the pros and cons of the proposal. The Wage and Hour Defense Institute of the Litigation Counsel of America (“WHDI”), a national organization comprised of top-tier wage and hour defense attorneys from across the United States, submitted comments pointing out the seriously flawed aspects of the proposed changes and warning of the unintended hidden costs and burdens that may result. Dykema’s Rob Boonin, a member and immediate past chair of the WHDI, contributed to the preparation of the formal comments submitted. Just over 5,000 of the 250,000 comments have warranted posting by the DOL on its website, including those submitted by the WHDI.
The WHDI takes the position that the newly proposed rules do not simplify the interpretation of the FLSA, and will lead to more (not less) litigation. In its analysis, the WHDI asserts that the proposed rules will create significant hidden administrative and employee morale costs and, contrary to the impression created in the press, will not obligate employers to increase an employee's total compensation under the FLSA when converting from exempt to non-exempt status. Please click here for a copy of the comments submitted by the WHDI.
The conventional wisdom is that DOL will still go through with its plan to dramatically increase the salary level and thereby disrupt the pay structures of a wide-range of employers.