I have blogged often on these new OT regulations and now it seems the game is continuing, with opposition (not unexpected) from the current administration. The USDOL has released its request for information (RFI) on the revision of the white-collar overtime exemption rules. This has engendered, and will continue to engender, a great deal of controversy. The Obama administration-authored changes to the rules would double the salary level for workers to qualify as overtime-exempt.
The request for information requests stakeholder input on the salary test for exemption under the Fair Labor Standards Act. The questions that the DOL has posed shows that the agency is weighing many options for the rule. These include setting the salary threshold differently depending on geographical area or possibly eliminating any salary test at all and focusing only on employee job duties to determine if a white-collar exemption (executive, administrative, professional) applied.
Alfred Robinson, a former WHD Administrator, and someone likely to know, has stated that. “I’ve seen offices that maybe pushed liquidated damages or things of that nature beforehand are not so adamant about it this year.” He added that, “I read the tea leaves as suggesting that hopefully some reason is coming into some of the enforcement practices.”
In November 2016, an employer group sought and secured a nationwide injunction from a federal court in Texas against the proposed overtime rule. The new Secretary of Labor has indicated that the new salary level should be set somewhere between the old level and the proposed one (approximately $47,000 per year), but, significantly, the RFI does not suggest the level where it should be set. The DOL states that “concerns expressed by various stakeholders after publication of the 2016 final rule that the salary level would adversely impact low-wage regions and industries have further shown that additional rulemaking is appropriate.”
The exemption test is now tri-partite—employees must be salaried, must earn a certain minimum salary and must perform certain duties. The exemption regulations are updated periodically; the last time was in 2004 when the salary level was raised from $250 per week to $455 per week and some changes were made to the duties components of the so-called white-collar exemptions. The current proposal would not touch the duties tests but would raise the salary level to $913 per week.
The RFI does not trigger the formal rulemaking process that will rescind or modify the proposed (and currently enjoined rule) but the purpose is to secure data and feedback on an issue of concern. Significantly, the agency is on record as stating that it will not seek to revise the rule unless the Fifth Circuit affirms the DOL’s ability and right to establish a salary test.
I find most interesting the concept that only duties should determine whether an employee is exempt or not. That might make it easier for employers to maintain lower level supervisors as exempt, as for example, in the retail industry. Maybe employers would like even better the reverse—if the employee makes a certain amount of salary, he/she is, by definition, exempt.
That seems simpler…