Department of Labor Releases a Request for Information Seeking Public Comment on Overtime Regulations
President Donald Trump's Department of Labor ("DOL") issued a public Request for Information ("RFI") seeking comments on what, if any, increase it should make to the minimum salary requirement of the white collar exemptions. An RFI is an optional step sometimes used by government agencies when drafting rules in order to obtain public input on whether a new rule or changes to an existing rule are warranted. In this instance, the RFI begins a new rulemaking process regarding overtime and the salary threshold. Specifically, the DOL is seeking comment on 11 issues (see below) that will help the DOL decide whether and what it should establish as the salary level for the white collar exemptions.
The DOL is still appealing a Texas District Court Judge's nationwide preliminary injunction blocking the DOL's Final Rule that would have doubled the required salary level for the white collar overtime exemptions under the Fair Labor Standards Act ("FLSA") from $23,660.00 to $47,476.46. The district court invalidated the Final Rule because Congress intended the exemptions to turn on an employee's specific duties, not a specific salary level. The government appealed arguing in part that the district court erred in finding that the DOL may not set a minimum salary as a requirement of the exemptions. The United States Fifth Circuit Court of Appeals has scheduled oral arguments for October 2, 2017, and an opinion from the court is expected in 2018.
In the interim, however, the DOL is seeking public comment on the following 11 issues:
- Is updating the 2004 salary level for inflation an appropriate basis for setting the standard salary level?
- Should the regulations contain multiple standard salary levels?
- Should the DOL set different standard salary levels for the executive, administrative, and professional exemptions?
- What method should the DOL use to set the salary test?
- What is the proper relationship between the standard salary and duties test?
- To what extent did employers already comply with the new regulation and how would a change in the salary amount affect employers?
- Would a test for exemptions that relies solely on the duties performed by the employee without regard to the amount of salary paid by the employer be preferable to the current standard test?
- Does the salary level set in the 2016 Final Rule exclude from exemption particular occupations that have traditionally been covered by the exemption and, if so, what are those occupations?
- Should the DOL permit the use of non-discretionary bonuses and incentive payments (including commissions) to satisfy a standard salary level?
- Should there be multiple total annual compensation levels for the highly compensated employee exemption?
- Should the DOL automatically update the standard salary level and the highly compensated employee total annual compensation level on a periodic basis to ensure that they remain effective, in combination with their respective duties tests, at identifying exempt employees?
If you want to review all the questions posed by the DOL, visit regulations.gov.
Should employers seek to submit written comments to the RFI, they must do so on or before September 25, 2017. Instructions for submitting comments to the RFI are available here. Clark Hill is ready to assist any employer who decides to submit public comments to the RFI. We also will continue to monitor any proposed changes to the overtime rules and to update you on any important developments.
If you have any questions regarding the FLSA overtime regulations and/or the DOL's Request for Information, please contact Scott Cruz or another member of Clark Hill's Labor and Employment Law practice group.