Have ideas on the FLSA’s overtime rule? Now’s your chance!
Posted August 29, 2018
The Wage and Hour Division (WHD) of the U.S. Department of Labor announced that in the upcoming weeks it will hold public listening sessions to gather views on the Part 541 white collar exemption regulations, often referred to as the “overtime rule.” Issued under the Fair Labor Standards Act (FLSA), these regulations implement exemptions from overtime pay requirements for executive, administrative, professional, and certain other employees. The WHD plans to update the overtime rule and is interested in hearing the views and ideas of participants on possible revisions to the regulations.
The provisions include the salary level employees must be paid to be considered exempt from the overtime provisions. Currently, that level is $455 per month, or $23,660 per year. In 2016, the WHD did revise the rule to increase that level to $913 per month or $47,476 per year, but was sued and the rule never took effect. One of the more controversial provisions of the rule was that the salary level would increase yearly.
The WHD is currently planning on publishing a proposed rule in early 2019.
The questions the WHD is asking for consideration in the listening sessions include the following:
- What is the appropriate salary level (or range of salary levels) above which the overtime exemptions for bona fide executive, administrative, or professional employees may apply?
- What benefits and costs to employees and employers might accompany an increased salary level?
- How would an increased salary level affect real wages (e.g., increasing overtime pay for employees whose current salaries are below a new level but above the current threshold)?
- Could an increased salary level reduce litigation costs by reducing the number of employees whose exemption status is unclear?
- Could this additional certainty produce other benefits for employees and employers?
- What is the best methodology to determine an updated salary level?
- Should the update derive from wage growth, cost-of-living increases, actual wages paid to employees, or some other measure?
- Should the WHD more regularly update the standard salary level and the total-annual-compensation level for highly compensated employees?
- If so, how should these updates be made?
- How frequently should updates occur?
- What benefits, if any, could result from more frequent updates?
Listening sessions will be held throughout September in Atlanta, Seattle, Kansas City, Denver, and Providence. Registration is required.
This article was written by Darlene M. Clabault, SHRM-CP, PHR, CLMS, of J. J. Keller & Associates, Inc.
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