Just when you thought it was behind us…
By Sharyn Weinfurtner, HR Consultant, ESC
In 2016 the US DOL issued final regulations raising the Federal minimum weekly salary level for exempt employees to $913 from $455 effective December 1, 2016. This had employers all around the country scrambling to figure out ways to compensate formerly salaried exempt level employees, so their compensation would not have economic injury. At the eleventh hour, the US District Court for the Eastern District of Texas issued a nationwide injunction prohibiting the US DOL from implementing this for a wide variety of reasons.
The US DOL recently stated it no longer wishes to support the raise to the $913 salary level. Rather it intends to support that it has the authority to establish a salary level test for white collar exemptions. It has informed the Fifth Circuit that it will undertake further rulemaking to determine what an appropriate salary level should be if it is decided the US DOL has the authority to establish a minimum salary level. On July 26, 2017 the US DOL published a Request for Information (RFI) regarding the Fair Labor Standards Act (FLSA) exemptions for executive, administrative, professional, outside sales and computer employees.
To move forward numerous questions need to be asked. Here are some questions the US DOL have in their RFI:
- Would updating the 2004 salary level ($455.00 per week) for inflation be an appropriate basis for setting the standard salary level? If so, what measure of inflation should be used?
- Should the regulations contain multiple standard salary levels? How should these levels be set: by size of employer, census region, census division, state, metropolitan statistical area, or some other method?
- Should the regulations contain different salary levels for the executive, administrative, and professional exemptions?
- To what extent did employers, in anticipation of the implementation of the $913.00 per week salary level, increase salaries of exempt employees to retain their exempt status?
- To what extent did employers intend to convert exempt employees to non-exempt status in anticipation of the implementation of the $913.00 per week salary level, but change their implicit hourly rates so that the total amount paid would remain the same even with overtime?
- Would a duties-only test for the white collar exemptions be preferable?
- Should the salary levels be automatically updated on a periodic basis? If so, what mechanism and what time period should be used for the automatic updates?
If you are a small business owner what does this mean for you? It means there is time for your voice to be heard! Let the US DOL know how these potential changes will impact the bottom line of your business and what it will do to your profits. Public comments will be accepted until September 25, 2017 at the website below.