The U.S. Department of Labor (DOL) announced in its fall regulatory agenda, that it intended to issue a Notice of Proposed Rulemaking (NPRM) to determine what the salary level for exemption of executive, administrative and professional employees should be by October 2018. However, the DOL has recently indicated that the proposal be delayed and it will be issued by January 2019.
Pursuant to the Fair Labor Standards Act (FLSA), employees must be paid at least 1.5 times their regular rate for any hours worked beyond 40 in a week, unless they are properly classified as exempt. Among other requirements, the FLSA’s administrative, executive and professional (white-collar) exemptions set a minimum salary that employees must earn.
In 2016, under the Obama administration, the DOL announced that the salary threshold for exempt employees would be raised. The minimum salary level for exempt employees under the Fair Labor Standards Act (FLSA) would have increased from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). However, a federal judge halted the implementation of the rule in December 2016 and held it was invalid. The DOL appealed the holding to the U.S. 5th Circuit Court of Appeals, but then requested that the litigation be stayed while the DOL considered a new or revised rule. Currently, the final outcome of the old or new overtime rule is still uncertain and the matter remains stayed.
Clarification from the DOL has been long anticipated and it now appears that a NPRM will be delayed even further, according to the DOL’s spring regulatory agenda. It is uncertain as to what the result will be, but it is likely that the new proposed salary threshold will be lower than the previous proposal and, therefore, less jobs will be affected. We will continue to keep you updated as to developments in this matter.