USDOL

The USDOL Issues a Proposed Rule to Clarify and Amend the Fluctuating Workweek Method of Overtime Compensation

November 13, 2019

By Subhash Viswanathan

On November 5, the U.S. Department of Labor published a proposed rule in the Federal Register to provide some clarity for employers that seek to use the fluctuating workweek method of overtime compensation under the Fair Labor Standards Act.  The proposed amendment lists each of the five requirements for using the fluctuating workweek method separately, instead of including all of the requirements in paragraph form as the current regulation does.  The proposed amendment also includes additional language not currently contained in the regulation, explicitly stating that bonuses, premium payments, and other additional payments of any kind are not incompatible with the use of the fluctuating workweek method of computing overtime.

Read More >> The USDOL Issues a Proposed Rule to Clarify and Amend the Fluctuating Workweek Method of Overtime Compensation

USDOL Issues Final Regulations to Increase the Salary Level to Qualify for the White Collar Exemptions

October 1, 2019

By Subhash Viswanathan

On September 27, 2019, the U.S. Department of Labor published its final regulations in the Federal Register to increase the minimum weekly salary to qualify for the Fair Labor Standards Act white collar exemptions from $455 per week ($23,660 per year) to $684 per week ($35,568 per year).  These new regulations become effective on January 1, 2020.

Read More >> USDOL Issues Final Regulations to Increase the Salary Level to Qualify for the White Collar Exemptions

The U.S. Department of Labor Issues New Proposed Regulations on Joint Employer Status

April 23, 2019

By Paul J. Buehler III

On April 1, 2019, the Wage and Hour Division of the U.S. Department of Labor ("DOL") announced a proposed update to its joint employment regulations, which is the first significant revision to the DOL's joint employment rules since their promulgation in 1958.  The proposed updates to the regulations attempt to clarify joint employer status for purposes of wage liability under the Fair Labor Standards Act ("FLSA").

Read More >> The U.S. Department of Labor Issues New Proposed Regulations on Joint Employer Status

USDOL Issues Proposed Regulations to Increase the Salary Level to Qualify for the White Collar Exemptions

March 7, 2019

By Subhash Viswanathan

On March 7, 2019, the U.S. Department of Labor issued proposed regulations that would increase the minimum weekly salary to qualify for the Fair Labor Standards Act white collar exemptions from $455 per week ($23,660 per year) to $679 per week ($35,308 per year).  These new proposed regulations are intended to replace the USDOL's 2016 regulations raising the minimum weekly salary to $913 per week ($47,476 per year), which were held by the U.S. District Court for the Eastern District of Texas to be invalid approximately one week before those regulations were set to take effect.

Read More >> USDOL Issues Proposed Regulations to Increase the Salary Level to Qualify for the White Collar Exemptions

How Do Vacation and Sick Leave Buy-Back Programs Affect the Calculation of the Regular Rate for Overtime Purposes?

February 20, 2019

By Theresa E. Rusnak

Employers who provide sick leave and vacation leave time may also have a policy or practice of allowing employees to “sell back” accrued, unused time.  Under these “buy-back” programs, the employer will, for a select time period, pay employees for their unused time, in addition to any actual work performed by the employee in that workweek.  This then raises the question:  do these payments for sick and vacation time have to be counted as part of the employee’s “regular rate” for purposes of computing overtime due during the workweeks in which that time is paid out to the employee?

Read More >> How Do Vacation and Sick Leave Buy-Back Programs Affect the Calculation of the Regular Rate for Overtime Purposes?

U.S. Supreme Court Rejects Narrow Construction of FLSA Exemptions - April 2018

April 5, 2018

By Subhash Viswanathan and Stephanie H. Fedorka

On April 2, the U.S. Supreme Court held, in Encino Motorcars, LLC v. Navarro, that service advisors at automobile dealerships are exempt from the overtime requirements of the Fair Labor Standards Act.  The Court was divided 5-4 on this issue, with Justice Thomas writing the opinion on behalf of the majority and Justice Ginsburg writing the opinion on behalf of the 4 dissenting Justices.  The Court reversed a Ninth Circuit Court of Appeals' decision, which found that service advisors were non-exempt employees who were eligible for overtime pay.

Read More >> U.S. Supreme Court Rejects Narrow Construction of FLSA Exemptions - April 2018

U.S. Department of Labor Issues Request for Information on White Collar Exemption Regulations

July 25, 2017

By Subhash Viswanathan

Today, July 26, 2017, the U.S. Department of Labor (“USDOL”) published a Request for Information (“RFI”) in the Federal Register regarding the regulations defining the Fair Labor Standards Act (“FLSA”) exemptions for executive, administrative, professional, outside sales, and computer employees.  Public comments can be submitted by any of the methods set forth in the RFI by September 25, 2017.

Before summarizing some of the subjects on which the USDOL is soliciting input from the public, here is a quick review of the history of the USDOL’s efforts to revise its FLSA white collar exemption regulations.  As you certainly recall (who can forget?), the USDOL issued final regulations last year increasing the salary threshold from $455.00 per week to $913.00 per week in order to qualify for the executive, administrative, professional, and computer employee exemptions.  Those regulations were supposed become effective December 1, 2016.  However, shortly before the effective date, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction prohibiting the USDOL from implementing its revised regulations based on its holding that Congress intended the white collar exemptions to be defined with regard to duties — not with regard to a minimum salary level.  The USDOL appealed to the Fifth Circuit Court of Appeals.  In its recent reply brief, the USDOL stated that it no longer wishes to argue in support of the $913.00 salary level, but instead only intends to argue that it has the authority to establish a salary level test for the white collar exemptions.  The USDOL informed the Fifth Circuit that it intends to undertake further rulemaking to determine what the appropriate salary level should be if the Court holds that it has the authority to establish a minimum salary level.

The USDOL’s publication of this RFI is a preliminary step toward its issuance of a notice of proposed rulemaking.  There are many questions posed by the USDOL in its RFI.  Some noteworthy questions are:

  • Would updating the 2004 salary level ($455.00 per week) for inflation be an appropriate basis for setting the standard salary level and, if so, what measure of inflation should be used?
  • Should the regulations contain multiple standard salary levels and, if so, how should these levels be set:  by size of employer, census region, census division, state, metropolitan statistical area, or some other method?
  • Should the regulations contain different salary levels for the executive, administrative, and professional exemptions?
  • To what extent did employers, in anticipation of the implementation of the $913.00 per week salary level, increase salaries of exempt employees to retain their exempt status?
  • To what extent did employers intend to convert exempt employees to non-exempt status in anticipation of the implementation of the $913.00 per week salary level, but change their implicit hourly rates so that the total amount paid would remain the same even with overtime?
  • Would a duties-only test for the white collar exemptions be preferable?
  • Should the salary levels be automatically updated on a periodic basis and, if so, what mechanism and what time period should be used for the automatic updates?

It is a positive development for employers that the USDOL no longer intends to defend the increase in the minimum salary level to $913.00 per week in order to qualify for the executive, administrative, professional, and computer employee exemptions.  However, the USDOL will likely propose some changes to its white collar exemption regulations upon receipt of input from the public with respect to its RFI and after the Fifth Circuit issues its decision.  Those proposed changes could include an increase in the minimum salary level, but such a proposed increase will almost certainly not be as drastic as the one that nearly went into effect last year.