White-Collar Exemptions

U.S. Department of Labor Proposes to Increase the Salary Level to Qualify for the White Collar Exemptions

September 6, 2023

By Subhash Viswanathan

On Aug. 30, 2023, the U.S. Department of Labor (USDOL) issued a proposed rule to increase the minimum weekly salary to qualify for the Fair Labor Standards Act white collar exemptions from $684 per week (the annual equivalent of $35,568) to $1,059 per week (the annual equivalent of $55,068). This new proposed salary level is based on the 35th percentile of earnings of full-time salaried workers in the lowest-wage Census Region. When the exempt salary level was last raised to $684 effective Jan. 1, 2020, the USDOL set it at the 20th percentile of earnings of full-time salaried workers in the lowest-wage Census Region.

Read More >> U.S. Department of Labor Proposes to Increase the Salary Level to Qualify for the White Collar Exemptions

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

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

Reminder: New York Minimum Wage Rates and Salary Thresholds for the Executive and Administrative Exemptions Will Increase on December 31, 2018

December 6, 2018

By Subhash Viswanathan

Although the minimum wage rate under the Fair Labor Standards Act remains $7.25 per hour and the U.S. Department of Labor has not issued any new proposed regulations to raise the minimum salary to qualify for a white-collar exemption under federal law, employers in New York will be required to comply with the new state minimum wage rate and the new state salary threshold to qualify for the executive and administrative exemptions, effective December 31, 2018.

Read More >> Reminder: New York Minimum Wage Rates and Salary Thresholds for the Executive and Administrative Exemptions Will Increase on December 31, 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.