On November 22, 2016, many of you breathed a (big) sigh of relief. Why? Because a Texas federal judge issued a nationwide temporary injunction precluding the U.S. Department of Labor’s (DOL) 2016 overtime regulations from going into effect on December 1, 2016. These regulations would have significantly increased the minimum salary amount for the executive, administrative and professional “white collar” exemptions.
What’s happened since? In December 2016, the DOL, under President Obama, appealed the injunction. The current DOL, under new Secretary of Labor Alex Acosta, has not withdrawn the appeal. The reason: the DOL maintains that contrary to the Texas court’s ruling, it does have the authority to set a minimum salary level for the white collar exemptions. In pursing the appeal, the DOL has asked the appellate court to affirm the Department’s authority.
However, in a strange turn on June 30, 2017, the DOL then advised the appellate court that the DOL “has decided not to advocate for the specific salary level ($913 per week, which equals $47,476 annually) set in the 2016 Final Rule at this time and intends to undertake further rulemaking to determine what the salary level should be.” Translation: The DOL is starting from scratch.
To that end, today, the DOL issued a “Request for Information” (RFI) asking for public input on eleven (11) questions related to the white collar exemptions and the salary level. Do these questions indicate that all issues related to the exemptions and salary level are now on the table for consideration? A few of the questions:
- Should the 2004 salary level ($455/week) be updated for inflation? (Question 1)
- Should there be multiple salary levels, such as by size of employer, census region, or state or metropolitan location? (Question 2)
- Should each exemption category – executive, administrative and professional – have its own salary level? (Question 3)
- Does the 2016 salary level of $913/week work with or against the duties test in determining an employee’s exempt status? (Question 5)
- What did employers do to prepare for the December 1, 2016 effective date of the $913/week salary level and how has that affected employees and businesses? (Question 6)
- Should exempt status be determined solely by duties? (Question 7)
- What amount of incentive compensation and non-discretionary bonuses should be counted toward fulfilling the minimum salary level for an exempt employee? (Question 9)
- Should the salary level be automatically updated on a periodic basis and if so, what would be the basis for the update and should the update be delayed due to “negative economic growth”? (Question 11)
According to the RFI, the public input to these questions will “greatly aid” the DOL in developing regulations. There is no timeline on this process.
The public comment period is now open until Monday, September 25, 2017 (60 days). Industry organizations, unions and other interest groups will certainly submit comments to the DOL’s questions. If you have a comment, don’t be shy – the DOL wants to hear from you!