Obama Unveils FLSA Proposed Overtime Changes
The anxiously awaited proposed changes in regulations defining the federal Fair Labor Standards Act’s overtime regulations have been published by the U.S. Labor Department for public consideration and comment. Click here to see the proposal, which President Barack Obama announced via a June 29 online editorial in the Huffington Post.
The DOL currently intends to increase the minimum salary threshold by approximately 200%, to $921 per week, which equates to a $47,892 salary annually. This is on the high side of what we had anticipated.
It appears that sharply reducing the proportion of exempt workers and “giving employees a raise” are the driving purposes behind this figure, rather than the proposal’s being the result of the fundamentally distinction-drawing principles that are actually authorized and have historically been followed.
In addition, DOL wants to raise the total-annual-compensation threshold for the “highly compensated employees” exemption by about 22%, from its present $100,000 minimum to a new level of $122,148.
And for the first time in the more-than-75-year history of these exemptions, the salary threshold now will be adjusted automatically annually – either through a fixed percentile or the Consumer Price Index for all Urban Consumers (CPI-U). The DOL’s accompanying remarks suggest that this might result in a $970 threshold (annualizing to $50,440) as early as next year. The “highly compensated” threshold would also be “updated” annually.
THE DUTIES-RELATED TESTS
The good news is that DOL is not yet proposing to change any of the exemptions’ requirements as they relate to the kinds or amounts of work performed. Readers will recall, for example, the widespread speculation that a strict more-than-50% requirement would be proposed in connection with the proportion of exempt work that would be necessary.
TRSA will submit comments on this proposal. We need to know what changes this will mean to your company and employees.
It’s difficult to predict when any final changes will actually be put into effect. The current target is July of 2016.