DOL proposes momentous new Wage-Hour regs

The anxiously awaited proposed changes in regulations defining the federal Fair Labor Standards Act's Section 13(a)(1) executive, administrative, professional, outside-sales, and derivative exemptions have been published by the U.S. Labor Department for public consideration and comment. Blaring headlines notwithstanding:

• These provisions are not in effect.
• The exemption rules have not yet been changed.
• Employers are not required to do anything differently for the moment.

The Compensation Tests
The DOL currently intends to increase the minimum salary threshold by approximately 200 percent, to $921 per week, which annualizes to $47,892. This is on the high side of what we had anticipated.

It appears that sharply reducing the proportion of exempt workers and "giving employees a raise" are the driving purposes behind this figure, rather than the proposal's being the result of the fundamentally distinction-drawing principles that are actually authorized and have historically been followed. We have previously written about these principles in the Fisher & Phillips Wage-Hour Blog.

In addition, DOL wants to raise the total-annual-compensation threshold for the "highly compensated employees" exemption by about 22 percent, from its present $100,000 minimum to a new level of $122,148.

And for the first time in these exemptions' more-than-75-year history, an "updated salary rate" would be published annually. DOL's accompanying remarks suggest that this might result in a $970 threshold (annualizing to $50,440) as early as next year. The "highly compensated" threshold would also be "updated" annually.

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