Here We Go Again: More Changes to the Overtime Rules08.29.17
As everyone on the planet probably knows by now, the Department of Labor promulgated new rules to the white collar exemptions under the Fair Labor Standards Act. These rules would have raised the minimum salary that must be paid to professional, administrative and executive employees for them to be exempt from overtime. At the eleventh hour, a federal judge in Texas issued a stay, which prevented the rules from going into effect. That litigation is now working its way through the courts.
In July, President Trump’s Department of Labor issued a Request for Information regarding the overtime rules. This signals that the Trump administration is certain looking to amend the rules again. While we will not know for a while exactly what the Department of Labor has in mind, the request for information (which is basically asking stakeholders to provide comments on various points) provides some hints. Based on their request for information, it appears that the following are possibilities:
- Maintain the status quo and leave the minimum salary as $455 per week;
- Raise the minimum salary to a level higher than the old threshold, but lower than that which was proposed by the Obama administration;
- Have different minimum salaries for different regions of the country; or
- Have different minimum salaries for different industries.
The idea of having different minimum salaries for different areas of the country is the most intriguing. This idea was advocated by many employer groups during the last round of regulatory changes. The thought is that an appropriate minimum salary for California would be drastically different than the appropriate minimum salary for, for example, the rural South. Geography has for some time played a role in the minimum salary. For example, the Obama regulations set the minimum salary as the 40th percentile for salaried workers in the lowest earning census region, which was the South. This would be very attractive to many employers.
Other employers, however, have expressed hesitancy. They suggest that it would be overly complex to have different minimum salaries in businesses that operate in various geographic areas.
While we do not know what the Department of Labor will ultimately decide, we will certainly monitor the situation closely. In the interim, any employers who wish to provide comments regarding proposed changes to the overtime rules are free to reach out to us. We would be glad to assist you with the process.