On March 13, President Obama asked Thomas Perez, The U.S. Secretary of Labor to “modernize and streamline” the Department of Labor’s white collar overtime exemption regulations. These regulations define the scope of the administrative, outside sales, computer exemptions, professional, under the FLSA. This is part of President Obama’s message of “giving America a raise” and also follows up on the Presidents Executive Order that raises the hourly minimum wage for federal contractors to $10.10 an hour.
While it is not possible to predict what the changes will actually be, it seems the President’s focus will be in three areas. The first is raising the minimum salary level. Second, revising the duties and requirement for the executive exemption and third refining the definition of a computer professional. A White House fact sheet outlines the key agenda points:
- Minimum Salary Level: The proposed regulations will increase the minimum salary level for white collar exempt employees. It is likely that the Department of Labor will consult inflation indexes and adopt policies that will automatically raise the minimum salary level annually.
- Duties Test: The DOL will either remove of revise the concurrent duties section under the executive exemption test.
- Computer Professional Exemption: It is likely that the DOL will further clarify the duties and position that do and do not qualify for the professional exemption under the FLSA. This may pose a big problem due to the fact that the duties test for this exemption is set forth in the statutory provisions of the FLSA.
All proposed changes to the regulations must go through notice and comment rulemaking. After these suggested rules are prepared, the DOL will issue a notice for the regulations proposed. The public will have between 30 and 90 days to file comments and complaints about the new rules. After the comment period has closed, the DOL will review and respond to the comments before the regulations became final. The entire process will probably take between 12 and 18 months to complete.
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