When this Article goes to press, the notice and comment period for the Department of Labor’s (DOL) proposed revisions to the “white collar” exemption rules will have closed. Barring an extension, we will be on our way to doing business under a significantly different set of rules.
The DOL has proposed only to raise the minimum salary threshold for a white collar employee to be considered exempt under the FLSA. The increase is substantial. The current salary threshold is $23,660 per year. The DOL is proposing to raise it to more than $51,000 annually. Many employers have expressed concern that it will not be feasible to raise the salary for some of their currently exempt employees high enough to meet the new threshold. Assuming that remains the case after the rules are finalized, those employers will need to decide how to deal with these employees who will then be non-exempt and entitled to overtime compensation. In theory, this does not sound that difficult, but in reality, there are many considerations that need to be taken into account. Some of those considerations include:
The DOL left open the possibility that, in its final rules, the Agency might also modify the duties test for the exemptions. More than a few experts think that the Agency will do just that. If that happens, employers will have very little time (maybe only 60 days) to then evaluate whether employees who earn more than the minimum salary threshold do the right types of work to continue to fall within the exemptions.
Employers are well-advised to use the time between now and when the final rules take effect to evaluate their exempt jobs and update job descriptions. By doing so, employers will be ready to make the correct classification decisions and adjustments when the regulations are finalized.
