Godfrey & Kahn Updates
Speak now! Salary basis test back on the table: Public comment deadline fast approachingAugust 29, 2017
As discussed in a prior blog post, the Department of Labor (DOL) issued new regulations in 2016 that would have increased the salary basis test for the so-called “white collar” exemptions to the Fair Labor Standards Act’s overtime pay requirements. The new rule would have increased the minimum salary to qualify for a white collar exemption from $455 to $913 per week. The new requirements were to go into effect on December 1, 2016, until a federal district court in Texas halted the rule’s implementation and enjoined the DOL from enforcing the Final Rule.
President Donald Trump’s DOL signaled that it will scrap the 2016 Final Rule and start from scratch, rather than defend the 2016 Final Rule in court. The DOL Wage and Hour Division recently announced it would accept public comments until Sept. 25, 2017, on new overtime regulations.
The DOL seeks comments on a wide range of wage and hour topics and has specifically inquired about the impact the 2016 Final Rule had on employers as they prepared for the new requirements. For example, in addition to questioning how and at what level the salary basis test should be set, the DOL asks:
- Whether the regulations should contain multiple salary levels and how they should be set? Whether employer size, census region, state or some other method should control how such levels would be set?
- To what extent employers have already adjusted salary levels for exempt employees in anticipation of the 2016 Final Rule?
- How increases to exempt employee salaries decrease non-exempt employees’ hours?
- Whether employers converted exempt employees to hourly employees and decreased their hourly rates so that the total amount paid would be the same?
- Whether changes to the duties test should be made?
- Whether a “duties-only” exempt test should be used, without consideration of salary?
The DOL’s Request for Information sets forth instructions on submitting comments. Employers and individuals are encouraged to submit comments and information to the DOL on or before the Sept. 25, 2017 deadline.