Proposed FLSA Changes
What's Next for Employers?
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On July 6, 2015, the Department of Labor (DOL) published a Notice of Proposed Rulemaking to amend the Fair Labor Standards Act's (FLSA) overtime exemptions. The DOL's proposed amendments focus on three key changes to the current FLSA regulations:
- Raising the standard salary level to qualify for the white collar exemption to $921 per week, or $47,892 annually (the 40th percentile of weekly earnings for full-time salaried workers).
- Increasing the total annual compensation requirement to qualify for the highly compensated exemption to $122,148 (the 90th percentile of weekly earnings for full-time salaried workers).
- Establishing a mechanism to annually update the salary and compensation levels for these exemptions going forward. The DOL requested comment on the following proposed methodologies to achieve this:
- Keeping the required levels at a fixed percentile of wages; or
- Adjusting the minimum salary and compensation amounts based on changes in inflation as measured by the Consumer Price Index for All Urban Consumers.
NEXT STEPS: The 60-day period for the public to comment on the proposed amendments ended on September 4, 2015. After reviewing the comments, the DOL will publish a "final rule". We expect the amended regulations to become effective sometime in 2016.
If adopted, the DOL estimates that these changes will impact
approximately 4.7 million workers.
CLICK HERE for additional information regarding the proposed revisions, including a Fact Sheet and FAQ.
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What Should Employers Do to Prepare?
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In anticipation of these changes, employers should evaluate employee classifications to:
- Determine which employees may become nonexempt under the revised regulations;
- Cautiously determine how to modify jobs and pay; and
- Develop a plan for implementing any necessary changes once the revisions take effect.
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If you have any questions about the proposed amendments to the FLSA regulations or need assistance analyzing how the changes may impact your business, please contact Katherin Nukk-Freeman or the Nukk-Freeman & Cerra, P.C. attorney with whom you normally work.
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