The U.S. Department of Labor (“DOL”) recently sent proposed regulations to the Federal Office of Management and Budget (“OMB”) to amend the Fair Labor Standard Act’s White Collar Exemptions – i.e., the professional, executive and administrative exemptions – by increasing the minimum salary requirement for exempt employees.
Readers may recall that in 2016, the Obama Administration planned to raise the minimum salary requirement for the White Collar Exemptions from $455 per week to $913 per week but was blocked from doing so by Judge Amos L. Mazzant of the United States District Court for the Eastern District of Texas. For a refresher on that case, take a look at our colleague, Bob Kilroy’s, article on Judge Mazzant’s decision here.
It is expected that OMB will take a few months to review the proposed regulations before they are published in the Federal Register, at which point the public (i.e., affected employers) will have the opportunity to review and comment on the proposed regulations for the first time. Following the public comment period, the DOL may further amend the proposed regulations based on comments received, or it could decide to adopt the regulations as proposed, without any further amendments.
Although we cannot anticipate with certainty where the proposed rule will set the minimum salary, several commentators expect the salary level to be set in the low to mid $30,000s, which would equate to a weekly salary of between $575-$700. If this were to happen, employees presently classified as exempt under one of the White Collar Exemptions making less than the new salary level would need to be reclassified as non-exempt hourly employees or, in the alternative, have their pay increased to at least the new salary level to retain their exempt status.
We will continue to track the status of the proposed regulations and update you when they are released for public comment.