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The Department of Labor proposed to change the rules regarding exemptions from the Fair Labor Standards Act’s minimum wage and overtime provisions in June 2015, when it opened up its comment period.  It got more than 250,000 responses.  Now it appears that the DOL will not release its final rule until late 2016, but it is anticipated the effective date for the rule change may be as short as 30-60 days.

The Department believes that many employees who are being classified as “white collar” exempt employees should be entitled to the benefits of the FLSA. In light of that fact, the proposed changes would include the following changes:
~ increasing the salary level threshold from $455 a week, or $23,660 a year, to $921 a week, or $47,892 a year.
~ increasing the total annual compensation for highly compensated employees to $122,148 from $100,000.
~ establishing a method for automatically updating salary and compensation figures to ensure they remain effective measures of those employees who should not be exempt from overtime requirements.
It is also anticipated that the DOL is going to make changes in the current “duties test” and may provide examples in order to provide better guidance to employers.
In order for an employee to be exempt from the FLSA’s requirements, an employee would have to fit into what is called a “white collar” exemption, which requires: (1) the employee must be paid a predetermined and fixed salary not subject to any reduction as a result of the nature of the tasks performed, (2) the salary must be at least the amount set by the Department, and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the Department’s regulations.
A highly compensated employee is exempt from the overtime pay requirement if paid at least $100,000 (including the weekly minimum) and regularly performs the duties required for executive, administrative, or professional exemption.
Although the rule change may be a year away, employers are wise to look at these issues now.  Disputes regarding overtime continue to make up a good part of the DOL’s examination of the Fair Labor Standards Act and with businesses making widespread changes in how work is performed in terms of location and supervision, it is possible that the classification presently in place would not pass the current test for an exemption from overtime.