Professionally Speaking October 2017-Strang, Patteson

FLSA Overtime Exemptions – What Does the Future Hold?

by Tony Renning of  Strang, Patteson, Renning, Lewis & Lacy, s.c.     920.420.7527

As you may recall, in 2014 President Obama directed the Secretary of Labor to “modernize and streamline” the Department of Labor’s (DOL) “white collar” exemptions – those exemptions from overtime for certain executive, administrative and professional employees. On May 18, 2016, the DOL finally released revised regulations governing the “white collar” exemptions.

The key elements included: (1) a significant increase in the salary-level threshold – essentially doubling the minimum salary level previously needed to qualify; (2) an automatic adjustment of the salary-level threshold every three years; and (3) an increase in the minimum total annual compensation required to qualify for the highly-compensated exemption.

These revised regulations were set to take effect December 1, 2016. However, the DOL was precluded from implementing and enforcing the revised regulations while the courts addressed the issue of whether the DOL possessed the authority to exclude employees based on salary-level alone, regardless of the duties the employees performed. Just recently, the Federal District Court for the Eastern District of Texas declared the revised regulations invalid. The District Court concluded that a regulation excluding many “white collar” employees from overtime based upon salary level alone is not what Congress intended.

That being said, it appears that some increase in the salary-level threshold will be coming based upon recent communication from the DOL. On July 26, 2017, the DOL announced it will be considering revisions to the FLSA Regulations on Overtime Exemptions. The DOL established a 60-day period – ending Sept. 25, 2017 – to submit comments and information pertinent to revising the salary-level threshold.

In particular, the DOL invited comments addressing: (1) whether the standard salary level established in the revised regulations effectively identified employees who may be exempt; (2) whether a different salary level would more appropriately identify such employees; (3) the basis for setting a different salary level; and (4) why a different salary level would be more appropriate or effective. Stay tuned!

For advice and counsel concerning wage and hour matters and, specifically, the FLSA Regulations on Overtime Exemptions, including the efforts to revise the regulations, contact Tony Renning at (920) 420-7527 or trenning@strangpatteson.com.

Tony Renning is a founding shareholder with Strang, Patteson, Renning, Lewis & Lacy, s.c. This article is intended to provide information only, not legal advice. For advice regarding a particular labor or employment situation, please contact the attorneys at Strang, Patteson, Renning, Lewis & Lacy, s.c.