Here’s your chance to help shape the final rules (and make sure your organization is prepared to comply with them)!
As many know, President Obama issued a directive to the Secretary of Labor last March to modernize and streamline the Fair Labor Standards Act's ("FLSA") existing regulations for executive, administrative, outside sales, computer and other professional exempt employees. These regulations have not been updated since 2004.
The Department of Labor (“DOL”) is expected to change the FLSA’s overtime rules in two significant respects: (1) the DOL is expected to raise the minimum salary threshold for overtime exemption significantly (note, the current threshold of US$455/week, set in 2004, is equivalent to US$561 in today’s dollars); and (2) the DOL will likely modify or even eliminate the current “primary duty” standard used to determine whether an employee qualifies under the white collar exemption. Close watchers speculate that the DOL may propose a strict “division of labor” test, requiring employers to prove that their salaried employees have spent at least 50 percent of their working hours performing “executive, administrative or professional duties” in order to qualify them under one of the white-collar exemptions. Employers in the following industries (those with a lot of lower-level supervisors) are likely to be hardest hit by the expected changes: retail, service, production, financial (loan officers), healthcare (supervisory nurses) and technology (computer technicians).
Squire Patton Boggs is at the forefront of these issues. We will be hosting a series of webinars designed to educate and assist employers in preparing for and implementing these regulatory changes, as well as helping employers shape the final regulations
Understanding the Impact of the Proposed Rules on Your Company
Employers should begin thinking about how the proposed rules will affect their business:
Raising the FLSA’s weekly salary threshold across the board will increase payroll costs for many employers.
A change from the “primary duty” to the “division of labor” standard could require changes to time-tracking procedures to track overtime, implementing task-tracking procedures to determine and document employee classification status.
Changes may require revising employee handbooks and/or policies to reflect the new regulations.
Multi-State Compliance Issues. FLSA sets federal minimum regulations, states can and do set more employee-friendly regulations or different exemption tests, which creates compliance challenges for multi-state employers.
Impacting the Final Rules
Once the DOL issues its notice of proposed rulemaking, there will be a 30-day public comment period. Then, the DOL will hear testimony regarding the proposed changes before issuing a final version of the revised regulations after which the final text of the regulations will be published in the Federal Register.
As part of this effort, we will provide participants with a deeper understanding about how they can have their voice heard in Washington and ultimately shape the final regulations. We will also educate and keep participants up-to-date on the proposed changes and how they will affect your organization, as well as getting your organization ready to comply with the final rules.
If you are interested in participating in this initial kick off webinar and the series, please register online.
Should have any questions or require assistance in the meantime, please contact our labor and employment lawyer Jill Kirila.