One of the cornerstones of workers’ rights in this country is the right to higher pay for every hour spent laboring over 40 hours in a week.
Despite this protection, many low-paid salaried employees work side-by-side with hourly employees, doing the same tasks and often working over forty hours per week, but without the benefit of overtime pay. This is because outdated rules allow employers to categorize certain salaried employees as “exempt” from the FLSA’s overtime protections by characterizing them as executive, administrative or professional employees (referred to as the “EAP” or “white-collar” exemption).
Since 1940, the regulations have required three criteria to be met for the exemption to apply:
1) the employee must be paid a set, fixed salary not subject to reduction due to quality or quantity of work;
2) the amount of salary paid must meet a minimum specified amount; and
3) the employee’s job duties must involve “executive, administrative, or professional” duties as defined by the regulations. To satisfy the EAP exemption, employees must meet certain tests regarding their job duties and generally must be paid on a salary basis at least the amount specified in the regulations. Some employees, such as doctors, lawyers, teachers, and outside sales employees, are not subject to salary tests. Others, such as academic administrative personnel and computer employees, are subject to special, contingent earning thresholds. The standard salary level for the EAP exemption is currently $684 per week.
This month, the U.S. Department of Labor announced publication of a Notice of Proposed Rulemaking, Defining and Delimiting the Exemptions for Executive, Professional, Outside Sales, and Computer Employees. The Department’s proposal includes increasing the salary level to the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region. If the proposal becomes law, the standard salary level for the EAP exemption will increase from $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year). The proposed rulemaking also aims to better define which employees are actually employed in a bona fide EAP capacity.
The proposed rulemaking will be open for public comment for 60 days. The department will consider all comments submitted before publishing a final rule. For more information on how to submit comments and to read the proposed rule, visit Regulations | U.S. Department of Labor (dol.gov) and Federal Register :: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees.
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