In a move following the precedent set by the Department of Labor (DOL) during the Obama Administration, the DOL has recently released a notice of proposed rulemaking (NPRM) that has serious implications for businesses across the United States.
The NPRM proposes to raise the minimum salary threshold to qualify for a white collar exemption from the Fair Labor Standards Act (FLSA). This exemption currently allows employers not to pay overtime to certain administrative, professional or executive employees, provided they earn at least $455 per week, translating into $23,660 annually.
However, the newly proposed rule would increase this salary threshold, making fewer employees eligible for the aforementioned exemption. While the exact increase and the potential ramifications are not specified at this time, corporations and law firms nationwide should stay informed about the proposal to predict its potential impacts on their operations.
The DOL under the Obama Administration also tackled this issue. In 2016, they sought to more than double the salary threshold to $47,476 annually, thereby significantly extending overtime protections to millions of workers. However, this time around, it remains to be seen how drastic the increase will be.
One possible coverage of this on-point topic is provided by Manatt, Phelps & Phillips, LLP. The campaign to increase the salary threshold for white collar exemptions suggests a strive towards a more equitable balance between labor and management. Regardless of one’s stance on the issue, it represents a significant shift in labor policy that legal professionals should be mindful of, due to its potentially wide-ranging consequences.
In light of this proposed rule, businesses and legal professionals are advised to closely monitor updates from the DOL and conduct their own analyses to ensure compliance with potential changes.