Since March 14, 2016, when the Department of Labor (DOL) transmitted its final rule to the Office of Management and Budget (OMB) increasing the salary required to qualify for the “white collar” overtime exemptions under the Fair Labor Standards Act (FLSA), employers have been encouraged to start planning to ensure compliance.1 Whether these regulations will be published sooner than employers expect remains to be determined. Among the issues to be evaluated carefully is how the regulations will impact not only wage and hour and employment laws, but also traditional labor law.
The New Prevailing Executive Salary Increases May Create Prevailing Wins for Union Organizing and Bargaining
The DOL proposes an increase in the white collar salary requirement from $455 a week (or $23,660 per year) to about $970 per week (or $50,440 per year) and could include an automatic adjustment to the “salary” test to ensure that new salary levels are an effective measure for the exemptions from overtime under the FLSA. The salary test for the “highly compensated” exemption would also increase from $100,000 per year to $122,148 per year. In addition, the DOL has requested further input from stakeholders on the “duties” tests for the various exemptions.