Around this time last year, the Department of Labor (“DOL”) issued a Notice of Proposed Rulemaking, focusing primarily on raising the salary threshold for “white collar” employees.
The DOL proposed to renew the standard salary level at the 40th percent of weekly earnings for full-time salaries workers, an amount that was predicted by the DOL, at the time of the proposed rule, to be $921 weekly, or $47,892 annually, a significant increase from the current threshold of $455 weekly. (Remember, this is based on the 40th percentile.) In addition to raising the salary threshold, the DOL proposed a mechanism for automatically updating the salary and compensation levels.
According to the DOL’s regulatory agenda, the DOL was targeting a July 2016 release date for the final rule. At this point, however, the circumstances indicate that the final rule may be released on or before the last week of May 2016. As the last step in the regulatory process, before publication in the Federal Register on March 14, 2016, the DOL sent its final rule to the White House Office of Management and Budget (“OMB”). While the OMB is permitted 90 days to conduct its review, it is reported that OMB generally takes only 30 to 60 days to conduct a full review, making the end of this month as the likely timeframe for the release of the final regulation.
If the final rule is passed by the end of this month, employers will probably have until July 2016, or 60 days, until full implementation would be required. In preparing for the likely release of DOL’s final rule, employers should keep the following points in mind:
- The salary threshold continues to be based on a percentage and the initial amounts provided were only projections. So, stay tuned for the final figures.
- Identify which “white collar” employees earn less than $60,000 per year and determine whether it would be more cost effective to give those employees a raise or pay them overtime.
- When deciding whether to give a raise, keep in mind that many employees who would qualify as “white collar,” telecommute or otherwise perform work that the employer may not be able to directly supervise. All of this time, regardless of whether it is authorized, must be counted in the employee’s total hours to determine whether overtime is owed.
Employee pay is a highly litigated subject in employment law. If you have any questions, the best advice it to contact a competent employment attorney.
The Eastern Pennsylvania Employment Log (EPELog) is a publication of the KingSpry Employment Law Practice Group. Jeffrey T. Tucker, Esquire, is our editor-in-chief. EPELog is meant to be informational and does not constitute legal advice.
