The U.S. Department of Labor’s proposed revisions to the “white collar” exemptions under the Fair Labor Standards Act are attracting attention from Congress. The House Subcommittee on Investigations, Oversight and Regulations held a hearing in October to hear concerns from business interests.
The white collar exemptions specify a salary level at which employees may be exempted from the payment of overtime for hours worked in excess of 40 in a week. It also spells out the types of duties that employees must be performing before the exemptions apply. The proposal dramatically raises the salary level from $24,660 to $50,440 per year, but it leaves the duties descriptions unchanged. Millions of workers who are currently ineligible for overtime payments will become eligible if the new rules go into effect.
The Subcommittee’s hearing focused on the dramatic degree of change in the salary threshold and the DOL’s handling of the change process. The Subcommittee chairman criticized the agency for failing to adequately assess the effect of the changes on small businesses–a requirement of the Regulatory Flexibility Act. He also pointed out that the salary threshold would be increased by 102%.
A National Restaurant Association spokesman criticized the agency for providing inadequate time for comment. He said the industry could not properly analyze the impact the new rules would have on businesses. The spokesman noted that the “listening sessions” held by the DOL to obtain input prior to issuance did not make up for the limited comment period that had been provided.
Although the hearing focused on the effect of the proposed changes on businesses, it must be remembered that the salary threshold in the current regulations has not been changed since 2004. Since that time, the cost of living has risen, and today, a salary of $25,000 is not much on which to raise a family. Whether or not the increased threshold proposed by the DOL is realistic, the current level excludes low-paid employees from being compensated for work hours over and above the normal workweek. Look for the final rule to set a threshold somewhere in the middle of the current and proposed amounts. Contact Labor Law Office, APC today to speak with a professional wage and hour attorney in California.
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