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Total Articles: 317

Day Rate Satisfies FLSA’s Highly Compensated Employee Salary Requirement, Fifth Circuit Rules

Paying an employee a day rate of $1,000 per day satisfies the salary basis test for purposes of the overtime exemption applicable to a “highly compensated employee” (HCE) under the Fair Labor Standards Act (FLSA), the U.S. Court of Appeals for the Fifth Circuit has ruled (2-1). Faludi v. U.S. Shale Solutions, L.L.C., No. 17-20808 (Aug. 21, 2019).

DOL Opinion Letter Applies the Highly Compensated Employee Exemption to Paralegals

Ultimately, the WHD concluded that the paralegals described in the July 2019 opinion letter qualified as exempt under the highly compensated employee exemption even if they did not exercise discretion and independent judgment with respect to matters of significance.

Fifth Circuit Confirms that a Day Rate Can Meet the Salary Requirements under the FLSA’s White Collar Overtime Exemptions

On August 21, 2019, the U.S. Court of Appeals for the Fifth Circuit issued an opinion in Faludi v. U.S. Shale Solutions, L.L.C. that may prove to be an important decision for companies that utilize day rate compensation.1 The decision settled two important issues, concluding that: (1) a guaranteed day rate that provides compensation exceeding $455 can meet the Fair Labor Standard Act (“FLSA”) salary requirements for the white collar overtime exemptions, and (2) the FLSA’s reasonable relationship test does not apply to the highly compensated exemption.

DOL to Publish “White Collar” Exemption Proposed Rule, Triggering 60-Day Comment Period

On March 22, 2019, the DOL’s Wage and Hour Division will publish in the Federal Register its proposed rule to revise the overtime exemption regulations for executive, administrative, professional, outside sales and computer employees.

DOL Proposes New Revisions to Overtime Exemption Rules

Executive Summary: The U.S. Department of Labor (DOL) recently issued its proposed overtime regulations to replace the Obama administration’s (enjoined) overtime rule. The DOL raised the minimum salary threshold requirement for workers to qualify for the Fair Labor Standards Act’s white collar exemptions to $35,308 per year (or $679 per week). The proposed rule raises the threshold from $23,660 per year (or $455 per week). For highly compensated employees, the DOL raised the salary threshold from $100,000 to $134,000. The proposed regulation would make more than one million additional workers eligible for overtime. The DOL also proposed regular increases to the threshold every four years following public comment.

DOL’s Proposed Overtime Regulations: A ComplianceHR and Littler Briefing

On March 7, 2019, the Wage and Hour Division of the U.S. Department of Labor published the long-awaited Notice of Proposed Rulemaking (NPRM) to revise the “white collar” overtime exemption regulations to $35,308. Issued under the Fair Labor Standards Act, these regulations implement exemptions from the overtime pay requirements for executive, administrative, professional, and certain other employees. If adopted, the proposed rule would replace the final rule issued in 2016. Although comments on the NPRM are due 60 days after official publication in the Federal Register, the time to prepare for change is now.

DOL Proposes New Rule Raising the Salary Threshold for White-Collar Overtime Exemptions

Last week, the U.S. Department of Labor (DOL) issued a Notice of Proposed Rulemaking that would raise the minimum salary threshold required for workers to qualify for the overtime exemptions for executive, administrative and professional workers under the Fair Labor Standards Act (FLSA). The proposal increases the threshold for the white-collar exemptions to $35,308 per year, or $679 per week, up about $12,000 from the current level of $23,660 per year ($455 per week). If approved, the DOL estimates the new rule would take effect in January 2020, and extend overtime protections to more than 1 million workers who are not currently eligible for overtime.

U.S. DOL Proposes Raising Salary Threshold for Certain “White Collar” Employees

Under the Fair Labor Standards Act, workers are entitled to overtime pay of 1 ½ times their regular rate of pay for hours worked over 40 in a workweek, but there are exemptions for executive, administrative, and professional employees (among other exemptions). To qualify for one of these three exemptions, an employee must meet both a “duties” test and a “salary” test. Under current salary test regulations, which have been in place since 2004, most employees must generally be paid a salary of at least $455 per week. ($23,660 annually). In 2016, the Department of Labor (“DOL”) issued regulations raising that salary threshold to $921 per week ($47,892 annually). A federal district court held those regulations to be invalid.

Department of Labor Proposes Increasing Minimum Exempt Pay Levels

The US Department of Labor (DOL) has finally proposed a new rule to update the pay thresholds necessary to satisfy certain “white collar” overtime exemption regulations after its prior rule was rejected by a federal court in 2016. On March 7, 2019, the agency announced the proposed rule, which would increase the minimum salary from $455 weekly ($23,660 annually) to $679 weekly ($35,308 annually) for workers whose duties qualify them for the executive, administrative, or professional exemptions from overtime. The agency also proposes to increase the minimum compensation to qualify for the highly-compensated employee exemption from $100,000 to $147,414 annually. While the proposed new minimum salary is less than the 2016 proposal, the new highly-compensated employee threshold is higher than the prior proposal. The agency estimates the minimum salary increase would make more than one million existing workers eligible for overtime and the increased threshold for highly-compensated employees would make another 200,000 employees eligible for overtime.

DOL Proposes Increasing Minimum Salary for Overtime-Exempt Employees to $35,308

The minimum annual salary for most employees exempt from the overtime requirements of the Fair Labor Standards Act (FLSA) would increase from its current level of $23,660 to $35,308 under draft rules proposed by the US Department of Labor (DOL).

USDOL Releases Proposed Exemption Changes (Overtime Rule 2.0)

The USDOL's long-awaited proposed white-collar exemption changes a/k/a Overtime Rule 2.0 has been made available. Once it is published in the Federal Register, the public will have 60 days to submit comments regarding, among other things, the proposed minimum salary threshold of $679 per week.

Department of Labor’s New Proposed Overtime Rule Released

The U.S. Department of Labor's (DOL) proposed overtime rule is now available. The 219-page proposal was submitted for final approval in January, according to the Office of Management and Budget.

Part 541 Overtime Rule, Round 2: How the New NPRM Differs From the 2016 Proposal

On March 7, 2019, the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) announced the release of its Notice of Proposed Rulemaking (NPRM) to revise the regulations defining who is an executive, administrative, professional, outside sales and computer employee exempt from the overtime and minimum wage protections of the Fair Labor Standards Act (FLSA). This NPRM—“Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees”—will be published in the Federal Register in March 2019.

The DOL’s New 2019 Overtime Proposal Has Arrived

On March 7, 2019, the U.S. Department of Labor (DOL) unveiled its new overtime proposal in a notice of proposed rulemaking (NPRM), which would update the salary thresholds according to which workers are entitled to overtime compensation. According to the proposal, the new salary level will increase from $455 per week (which amounts to $23,660 annually) to $679 per week (which amounts to $35,308 annually). If the proposal becomes final, this would be the first increase to the salary level since 2004.

Oldest Nationwide Misclassification Case Against Uber Gets Settled For $1.3M

The first-ever national misclassification case brought against Uber has now been put to bed. A federal court judge in North Carolina today gave her blessing on a $1.3 million settlement wrapping up the litigation, handing some 5,000 workers payouts ranging from $50 to almost $5,000.

DOL Issues Opinion Letter Clarifying When Employees Paid on Hourly, Daily, or Shift Basis Can Satisfy "Salary Basis" Requirement

On November 8, 2018, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued a new opinion letter addressing the circumstances under which an employee who is paid on an hourly, daily, or shift basis (subject to a weekly guarantee) may qualify as an exempt executive, administrative, or professional employee under section 13(a)(1) of the Fair Labor Standards Act of 1938 (FLSA). While not establishing a bright-line rule, the opinion letter confirms that: (a) a ratio of 1.5-to-1 between an employee’s usual weekly earnings and the weekly guarantee is acceptable; (b) a ratio that exceeds 1.5-to-1 is vulnerable to challenge; and (c) a ratio of 1.8-to-1 or more is probably not acceptable.

Door-to-Door Salesmen, Chauffeur Drivers Not Entitled to Overtime Pay under ‘Fair Reading’ of FLSA, Second Circuit Finds

For the first time, a federal appellate court has acknowledged its obligation to give a “fair reading” to all Fair Labor Standards Act (FLSA) overtime exemptions, as the U.S. Supreme Court stated in Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 (2018). For years, courts have narrowly construed the FLSA exemptions, resulting in many decisions adverse to employers.

Fifth Circuit Weighs in on Motor Carrier Act Overtime Exemption and Small Vehicle Exception

It is commonly understood that employees bear the burden of proving that they are covered by the Fair Labor Standards Act (FLSA), and, to avoid minimum wage or overtime obligations, the employer bears the burden of proving that an exemption to the FLSA applies. One such exemption – common in the transport and energy industries – is the exemption under the federal Motor Carrier Act (MCA). If an employer can demonstrate that workers are covered by the MCA exemption,1 then the FLSA’s overtime requirements will not apply to those workers—with one major caveat.

DOL Fact Sheet: Higher Education Institutions and Overtime Pay Under the FLSA

The U.S. Department of Labor (DOL) issued an informative “fact sheet” offering guidance on the hotly debated question of employee exemptions for minimum wage and overtime pay obligations under the Fair Labor Standards Act (FLSA). Fact Sheet 17S details common “white collar” exemptions at the federal level that apply to certain employees at higher education institutions. It breaks down the exemption analysis by common higher education job categories including:

Not All Deductions Are "Uniform" Under The FLSA

The federal Fair Labor Standards Act (FLSA) establishes minimum wage and overtime requirements, period. The FLSA does not explicitly require that employers cover all work-related costs, nor, does it do so by specifically prohibiting employers from imposing work-related costs on employees. Indeed, the FLSA permits an employer to impose these costs in their entirety on non-exempt employees. In other words, at least for FLSA purposes, it is not a matter of whether the employer can impose a cost, but the extent to which it can be imposed at one time depending on an employee's wages.

Minimum Salaries for White-Collar Employees: Will States Pick Up Where US Labor Department Left Off?

After the Department of Labor’s rule raising the minimum annual salary for most overtime-exempt employees from $23,660 to $47,476 was invalidated by a federal court last year, it appears some states may step in to finish the job started by the Obama administration.

Salary-Threshold Proposal Apparently Months Away

A recent U.S. Department of Labor regulatory status report indicates that no proposal to change the 2016 compensation revisions affecting the federal Fair Labor Standards Act's so-called "white collar" exemptions will be forthcoming for at least ten months.

Toll Road Ahead: Fourth Circuit Rules Mixed-Fleet Interstate Truck Drivers May Be Entitled to Overtime Pay

Despite the overtime exemption provided by the Motor Carrier Act, interstate trucking employers who operate “mixed fleets” – those with vehicles both over and under 10,000 pounds – may owe overtime pay to drivers of the smaller vehicles, the Fourth Circuit Court of Appeals recently ruled. Schilling v. Schmidt Baking Co., 2017 U.S. App. LEXIS 23257 (4th Cir. Nov. 17, 2017). The Fourth Circuit has jurisdiction over Maryland, North Carolina, South Carolina, Virginia and West Virginia.

Labor Department Proposes Reversing Obama-Era ‘Tip-Pooling’ Rule

Employers would be expressly permitted to require servers and other tip-earning employees to share their tips with employees working in the kitchen and other “back of the house” employee, but only when the employer does not use the tip credit and state law would not otherwise prohibit the practice, under proposed regulations published by the Department of Labor (DOL). This is a reversal of the current DOL regulations, which would be rescinded.

How Is 2017 Like 1947?

Once upon a time, a seriously-alarmed legislature grew concerned that wage-hour claims and litigation had gotten out-of-hand.

Salary-Threshold Autopilot Still Possible

A BloombergBNA report suggests that the U.S. Department of Labor is seriously considering retaining the Obama Administration's procedure (or something like it) for automatic "updates" to the compensation thresholds specified in the federal Fair Labor Standards Act's Section 13(a)(1) exemption regulations. Apparently, U.S. Labor Secretary Acosta recently revealed this in closed-door remarks to the U.S. Chamber of Commerce.

Department of Labor Files Appeal and Motion for Abeyance in Overtime Rule Litigation

There have been new developments in litigation over changes to regulations under the Fair Labor Standards Act (FLSA) that specify which workers are eligible for overtime pay.4

Is This Appeal for Real? DOL Seeks Abeyance As It Formulates New Overtime Regulations

On November 3, 2017, the U.S. Department of Labor (DOL) filed a motion with the U.S. Court of Appeals for the Fifth Circuit asking the appellate court to hold in abeyance the DOL’s appeal of a district court decision that invalidated controversial federal overtime regulations promulgated by the Obama administration in 2016. The purpose of the motion is to hold off on any ruling in the case while the DOL under President Trump works on its own proposed overtime regulations.

eLABORate: DOL Seeks More Time to Rewrite Obama-Era Overtime Threshold for White-Collar Workers, May Be Open to Lower Threshold

On October 30, 2017, the United States Department of Labor (DOL) appealed an August 31, 2017 ruling by United States District Judge Amos Mazzant, III, which struck down a controversial Obama-era overtime rule that would have made as many as 4 million more workers eligible for overtime pay. The appeal – which is being accompanied by a request for a stay pending the issuance of a new overtime rule – appears to be an effort to protect the DOL’s authority to set a lower salary threshold for overtime exemption. While the Trump administration is no longer backing the Obama-era proposal to hike the overtime threshold to over $47,000, Labor Secretary Alexander Acosta has signaled that he might be comfortable with a salary threshold in the low $30,000 range, to account for inflation since the rule’s last update in 2004.

USDOL Appeals Ruling Against Its "Overtime Rule" (Updated 10 31 17)

UPDATED 10 31 17: The U.S. Department of Labor has also announced its intention to "file a motion with the Fifth Circuit [U.S. Court of Appeals] to hold the appeal in abeyance while the Department of Labor undertakes further rulemaking to determine what the salary level should be."

WPI Wage Watch: Minimum Wage and Overtime Updates (October Edition)

As darkness falls across the land, the midnight hour is close[r] at hand for employers to revise their pay practices to ensure compliance with 2018 minimum wage rate changes. Hospitality industry employers may receive from the U.S. Department of Labor (DOL) a king-size treat, whereas entities may feel tricked by the Minnesota Department of Civil Rights’ interpretation of which employers are subject to the city’s minimum wage ordinance. Employers need not try to scream or start to freeze, because following is a thriller of an update concerning October minimum wage and overtime developments.

USDOL Appeals Ruling Against Its "Overtime Rule"

The U.S. Department of Labor has today filed a notice (link below) that it is appealing September's summary-judgment ruling against the compensation-related changes the agency sought to make in regulations defining the federal Fair Labor Standards Act's "white collar" exemptions.

Trick or Treat: DOL and Texas AFL-CIO File Appeal Notices in Overtime Lawsuit

On October 30, 2017, the U.S. Department of Labor (DOL) and the Texas AFL-CIO both filed Notices of Appeal in a highly-watched case involving the invalidation of controversial federal overtime regulations that had been scheduled to go into effect on December 1, 2016.

DOL Confirms New Overtime Rule Coming (Updated 10/31/2017)

The U.S. Department of Labor confirmed on October 30, 2017 that it intends to “undertake new rulemaking with regard to overtime.” While the DOL simultaneously filed an appeal of the district court order holding the prior overtime rule invalid, the DOL stated it intends to request that the Fifth Circuit “hold the appeal in abeyance while the Department of Labor undertakes further rulemaking to determine what the salary level should be,” according to the statement made by the DOL.

DOL Appeals Overtime Injunction

On behalf of the US Department of Labor (DOL), the US Department of Justice today appealed the permanent injunction invalidating the Obama administration's 2016 overtime rule.

Department of Labor Abandons Appeal of Overtime Rule

Yesterday, the U.S. Department of Labor (DOL) asked a federal appeals court to dismiss its appeal of the court order blocking its controversial 2016 “overtime rule” from taking effect, signaling the DOL’s official abandonment of the Obama-era rule in favor of the agency’s plan to pursue less-drastic overtime reform.

With the Overtime Appeal Over, It’s Now Time to Focus on the Do-Over

With the appeal of the overtime injunction in federal court now over, employers and trade associations now need to focus on the overtime do-over that is underway at the U.S. Department of Labor (DOL). More specifically, comments in response to the DOL’s request for information (RFI) regarding potential changes to the salary and duties tests for the white-collar regulations under the federal Fair Labor Standards Act (FLSA) are due no later than Monday, September 25.

Department of Labor Moves to Dismiss Appeal on Obama-Era Overtime Rule (UPDATED 9/7/2017)

As anticipated following last week’s decision by the U.S. District Court for the Eastern District of Texas, striking down the Department of Labor’s May 2016 Final Rule regarding the FLSA’s “white collar” overtime exemptions, the DOL has asked the Fifth Circuit to dismiss its appeal of the district court’s preliminary injunction invalidating the Rule last November. In a succinct, unopposed motion, the DOL noted that the district court’s final judgment rendered the preliminary injunction moot, citing established Fifth Circuit law for that proposition.

Department of Labor Moves to Dismiss Appeal on Obama-Era Overtime Rule

As anticipated following last week’s decision by the U.S. District Court for the Eastern District of Texas, striking down the Department of Labor’s May 2016 Final Rule regarding the FLSA’s “white collar” overtime exemptions, the DOL has asked the Fifth Circuit to dismiss its appeal of the district court’s preliminary injunction invalidating the Rule last November. In a succinct, unopposed motion, the DOL noted that the district court’s final judgment rendered the preliminary injunction moot, citing established Fifth Circuit law for that proposition.

Federal Court Invalidates New Overtime Rule

On August 31, 2017, the U.S. District Court for the Eastern District of Texas granted summary judgment for a diverse coalition of 55 business groups, led by the U.S. Chamber of Commerce and joined by numerous state governments, challenging the U.S. Department of Labor’s (DOL) redefinition of who qualifies as an exempt employee under the Fair Labor Standards Act (FLSA).1 The decision effectively nullifies the DOL rule in its entirety. Had the rule gone into effect, it would have more than doubled the minimum salary level for exempt white collar employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually).

Texas Federal Court Deals Yet Another Blow to USDOL's Overtime Rule (Updated 09 05 17)

UPDATED 09 05 17: The USDOL has submitted an unopposed motion for voluntary dismissal of the interlocutory appeal of the preliminary injunction.

Labor Department to Withdraw Overtime Appeal

As a result of the August 31 ruling by a federal district court judge invalidating highly controversial proposed revisions to federal overtime regulations, the U.S. Department of Labor (DOL), now has filed a motion with the U.S. Court of Appeals for the Fifth Circuit stating that it is dismissing the appeal of the preliminary injunction ruling issued by the same federal court judge earlier in the litigation.

Federal Court Declares DOL Overtime Rules Invalid

Executive Summary: Today, a federal District Court in Texas issued a decision declaring the Department of Labor’s (DOL’s) new overtime rules invalid and, therefore, permanently enjoining the implementation of these rules nationwide. This decision comes on the heels of a preliminary injunction issued by the same court in November 2016, halting the implementation of the new overtime rules, which were to have taken effect on December 1, 2016. Although the DOL had appealed the issuance of the preliminary injunction, this new development likely moots the pending appeal and will require President Trump and the DOL to reexamine their options going forward.

District Court Holds Overtime Rule Invalid; Is End of Obama-Era Rule Here?

The Department of Labor’s May 2016 Final Rule, which would have more than doubled the minimum salary necessary to satisfy the “executive, administrative or professional” (the “EAP” or “white collar”) overtime exemptions under the Fair Labor Standards Act, is invalid, the U.S. District Court for the Eastern District of Texas has held. State of Nevada v. U.S. Dep’t of Labor, No. 4:16-CV-731, 2017 U.S. Dist. LEXIS 140522 (E.D. Tex. Aug. 31, 2017). This cements the position the court took in granting a preliminary injunction against the DOL last November.

eLABORate: Federal Judge Rules Obama Administration's Expanded Overtime Rule Invalid

The same Texas federal judge who initially enjoined enforcement of the Department of Labor’s (“DOL”) controversial expanded overtime rule back in November 2016, ruled on August 31, 2017 in favor of business groups and states, finding that the DOL “exceeded its authority”, and that the Obama administration policy was “invalid.”

Next Nail In The Coffin: Overtime Rule Struck Down By Judge

A federal judge in Texas today struck down the controversial Obama-era change to the federal Fair Labor Standards Act that was intended to substantially raise the minimum salary threshold required for employees to qualify for the “white collar” exemptions. This signifies another nail in the coffin for the so-called “overtime rule,” which was originally blocked in late November 2016, and has since faced a very uncertain future given the subsequent change in White House leadership.

Texas Federal Court Deals Yet Another Blow to USDOL's Overtime Rule

A federal judge in Texas struck down the controversial Obama-era change to the federal Fair Labor Standards Act that was intended to substantially raise the minimum salary threshold required for employees to qualify for the "white collar" exemptions. This signifies another setback for the so-called "overtime rule". While the decision is favorable to employers, the fate of the Final Rule remains to be seen.

$47,476 Minimum Salary Struck Down, New Minimum of About $33,000 Expected

By raising the minimum salary threshold for most overtime-exempt employees from $23,660 to $47,476, the US Department of Labor (DOL) would have made an employee's job duties irrelevant, the US District Court for the Eastern District of Texas held. This is not what Congress intended when it wrote the Fair Labor Standards Act (FLSA); therefore, the court ruled that the DOL exceeded its authority by setting the salary level too high.

Overtime Appeal Oral Argument Scheduled for October 3

The U.S. Court of Appeals for the Fifth Circuit will hold an oral argument in New Orleans on Tuesday, October 3, 2017, in a highly-watched case involving revised overtime regulations that were supposed to become effective last December.

Oral Argument on Overtime Rule Appeal Scheduled for October 2nd

The Fifth Circuit Court of Appeals tentatively has set oral argument for October 2nd on the Obama-era overtime pay rule that has been blocked from government enforcement by a federal district court in Texas since last November.

Possible October Oral Arguments In Exemption Appeal

The Fifth Circuit U.S. Court of Appeals has "tentatively" scheduled oral arguments for the week of October 2, 2017 regarding the U.S. Department of Labor's efforts to overturn last November's preliminary injunction blocking salary-related changes affecting the federal Fair Labor Standards Act's "white collar" exemptions.

Oral Argument in Overtime Appeal to be Held in Early October

The U.S. Court of Appeals for the Fifth Circuit has tentatively scheduled oral argument for the week of October 2 in a highly watched case involving revised overtime regulations that were supposed to become effective last December. Those regulations were temporarily enjoined on a nationwide basis by a federal judge in Texas just before Thanksgiving.

Labor Department Asks for Public Input on FLSA White Collar Exemptions

As a preliminary step to replacing the December 1, 2016, Fair Labor Standards Act “white collar” exemptions Final Rule, the Department of Labor has issued a Request for Information (RFI) seeking public comment on a wide variety of issues related to potential revisions of the Rule. Comments on the RFI, published in the Federal Register on July 26, 2017, are by September 25, 2017.

DOL Seeks Input Before Issuing New Proposed Rulemaking on the White Collar Exemptions

On July 25, 2017, the Department of Labor's Wage and Hour Division announced its intent to publish a Request for Information (RFI) seeking input from the public before issuing revised proposed overtime exemption regulations to address, most significantly, the minimum salary level required for exempt status. These regulations apply to workers employed in an executive, administrative or professional capacity, and meet specific criteria relating to salary basis, salary level and job duties. The regulations, codified at 29 C.F.R. part 541, are referred to as the “white collar” exemptions.

USDOL To Publish "White Collar" Exemption Information Request (Updated 07 26 17)

A U.S. Department of Labor Request for Information will be published tomorrow morning to seek additional public comment regarding the 2016 compensation revisions in the regulations defining the federal Fair Labor Standards Act's so-called "white collar" exemptions. The agency has now released a preview of the document that will appear in the Federal Register.

Groundhog Day: DOL Issues Request for Information on Enjoined Overtime Rule

As Secretary of Labor Alexander Acosta testified in early June, the Department of Labor’s (DOL) Wage and Hour Division (WHD) has issued its request for information (RFI) on the Part 541 overtime regulations that were finalized in 2016. In this RFI, the DOL is seeking new comments, data, and information on an appropriate salary level for bona fide executive, administrative and professional exempt employees pursuant to section 13(a)(1) of the Fair Labor Standards Act (FLSA), as defined in the Part 541 regulations. This RFI will be published in the Federal Register on Wednesday, July 26, 2017.

DOL Asks for Input on New Overtime Rule

The US Department of Labor (DOL) is seeking comment from the public, including employers, on its plans to update the Fair Labor Standards Act (FLSA) overtime rules.

Context Matters: Mortgage Underwriters Don’t Meet FLSA’s Administrative Exemption, Ninth Circuit Concludes

Mortgage underwriters do not qualify for the Fair Labor Standards Act’s administrative exemption because they are more appropriately characterized as “production” employees, according to the U.S. Court of Appeals for the Ninth Circuit. McKeen-Chaplin v. Provident Savings Bank, 2017 U.S. App. LEXIS 11950 (9th Cir. July 5, 2017).

USDOL Submits Arguments In Salary Appeal

The U.S. Department of Labor has finally filed a Reply Brief supporting its request that the Fifth Circuit U.S. Court of Appeals overturn last November's preliminary injunction that blocked the salary-related changes in the regulations defining the federal Fair Labor Standards Act's "white collar" exemptions.

DOL Intends to 'Revisit' 47k Minimum Salary for Overtime-Exempt Employees

The Trump administration today defended its right to establish a minimum salary level for overtime-exempt employees

Trump DOL to the Fifth Circuit: Uphold Ability to Set a Salary Level, But Don’t Rule on $913 Per Week Threshold

For the past seven months, employers throughout the country have been wondering what the future would hold with respect to the revised overtime regulations that were supposed to become effective last December and what position the U.S. Department of Labor (DOL) under President Trump would take with respect to those regulations.

Some States Forge Ahead On Salary Thresholds

Since last November, employers have waited with bated breath for a resolution of the status of the U.S. Department of Labor's salary-threshold increase for an executive, administrative, professional, or derivative "white collar" exemption under the federal Fair Labor Standards Act's Section 13(a)(1). To date, there have been no substantive developments with respect to the Texas court's preliminary injunction.

Putative Class and Collective Action Under Enjoined U.S. DOL Overtime Rule Appears to Face Strong Argument for Dismissal

On June 7, 2017, a plaintiff brought a putative class and collective action against Chipotle for alleged violations of the Fair Labor Standards Act and New Jersey’s Wage and Hour Law.1 The plaintiff asserts the company misclassified her “apprentice” position as salaried-exempt in violation of state and federal law. She claims her duties were those of an hourly non-exempt employee and she was entitled to overtime. The plaintiff also claims that Chipotle violated the salary basis test by failing to pay her at least $913 per week in violation of a DOL overtime rule that was enjoined and never went into effect. At least as to the latter claim, the plaintiff's complaint will likely be subject to a strong argument favoring dismissal, in light of the preliminary injunction issued last November by a federal judge in the Eastern District of Texas in Nevada v. Perez.

Acosta Plans to Rescue Overtime Rule with Information Request

During the course of his testimony, Secretary Acosta stated that the Department plans to file a request for information (RFI) “probably in the next two to three weeks” in which it will seek information in connection with the overtime rule and its salary level. Secretary Acosta noted that it is a “problem” when the dollar amount of the salary level is not updated “because life gets a lot more expensive.” He also testified that the manner in which the final salary level of $47,476 per year “was done created a shock to the system.”

Travel Agencies Hail Proposed Legislation Providing Overtime Exemption, But Employment Bills in General Face Uphill Battle

Last week Rep. Francis Rooney (R-FL) introduced a bill that would remove travel agents from the Department of Labor's list of workers that cannot qualify for the Fair Labor Standards Act's (FLSA) overtime exemption for retail workers. Under the exemption at issue, an employee must work at an establishment “recognized as retail." In 1970, the DOL created a list of industries—including travel agents—that were expressly excluded from using this retail service establishment exemption. The Travel Agent Retail Fairness Act (H.R. 2515) would strike travel agencies from this regulatory list.

Appeal of DOL Final Overtime Rule Won’t Be Heard Until At Least The Summer

The Fifth Circuit granted the government’s request for additional time to file its final reply brief in the pending appeal of a nationwide injunction issued by a Texas District Court Judge, blocking the DOL’s controversial overtime rule raising the required salary level for the white collar exemptions.

Commissioned Salesman Might Be Owed Overtime Even Though He Earned More Than $70,000

As a recent appeals court ruling illustrates, paying an employee a lot of money does not necessarily guarantee that he will be exempt from overtime requirements.

Government Seeks Another Delay on DOL’s Overtime Rule

The government has asked for another delay in submitting its final brief to the Fifth Circuit Court of Appeals regarding the DOL’s Final overtime rule, which raised the salary level for the white collar exemptions from $23,660 to $47,476. The final reply brief was scheduled to be filed on May 1, 2017, after two earlier requests for an extension. Now the government has asked for an additional 60 days, until June 30, 2017, to file the reply brief.

Is a Nursing Coordinator Exempt From Overtime? Ninth Circuit Biopsies Administrative Exemption

The Ninth Circuit Court of Appeals recently ruled that whether a nursing staffing coordinator met the administrative exemption from federal overtime requirements is a factual issue that must be decided at trial. Quintiliani v. Concentric Healthcare Solutions, LLC, No. 14-17312 (December 1, 2016).

Fifth Circuit Grants Request to Delay Appeal on Federal Overtime Rule

The appeal regarding the validity of the federal overtime rule will not be fully briefed until May 1, 2017, according to an order issued by the Fifth Circuit on February 22, 2017, granting an unopposed request by the Department of Justice for an extension.

Overtime Appeal Faces Further Delay

So what’s the future of the overtime regulations that were supposed to become effective last December, but then got blocked by a federal judge just before Thanksgiving? It appears that we are going to have to wait a while longer to get any sort of a definitive answer.

Fifth Circuit Grants Government Request for Additional Time to State Position on Overtime Rule

Before the election the Department of Labor asked the Fifth Circuit Court of Appeals to expedite its appeal regarding the validity of the DOL’s Final Rule, which increased the salary level for the white collar exemptions. Earlier this week, however, following the inauguration of President Trump, the Department of Labor made the opposite request, asking the Court to slow down the process. The DOL asked the Court for additional time to submit its reply brief, currently due January 31, 2017, “to allow incoming leadership personnel adequate time to consider the issues.” The Fifth Circuit Court of Appeals granted that request on January 26, 2017, extending the due date for the reply brief to March 2, 2017.

Overtime Appeal Faces Uncertainty

Efforts to fast track the appeal of a nationwide preliminary injunction that prevents the U.S. Department of Labor (DOL) from implementing drastic proposed revisions to federal overtime regulations just got “Trumped.”

DOL Requests Additional Time to “Consider Issues” Before Filing Reply In Support of Salary Basis Rule

Earlier today, the Department of Labor filed an unopposed motion to extend the deadline for its next submission in support of its appeal of the salary basis rule injunction. The motion for extension requested until March 2, 2017 to submit the Department’s reply brief to the Fifth Circuit, and expressly stated that the extra time is “necessary to allow incoming leadership personnel adequate time to consider the issues.”

Business Associations Support Injunction Blocking Overtime Rule

Sixty business associations that oppose the drastic changes to the overtime rules that were proposed by the U.S. Department of Labor (DOL) under the Obama administration have filed an amicus brief with the U.S. Court of Appeals for the Fifth Circuit in support of a preliminary injunction that blocks the revised overtime rules from going into effect.

States Argue That Texas Court Properly Blocked Overtime Rule

In a legal brief filed on January 17, 2017, the 21 states that obtained a nationwide preliminary injunction that blocks the U.S. Department of Labor (DOL) from implementing its revisions to overtime rules under the Fair Labor Standards Act (FLSA) urged the U.S. Court of Appeals for the Fifth Circuit to uphold that injunction.

State Plaintiffs Urge Fifth Circuit to Affirm Nationwide Injunction Blocking DOL Overtime Rule

In the latest round in the litigation between 21 States, led by the State of Nevada, and the Department of Labor regarding the Final Rule, the State Plaintiffs filed their appeal brief today with the Fifth Circuit, urging the Court to affirm the district court’s order, which issued a nationwide injunction blocking the rule.

Lower-Court FLSA Salary Litigation Will Proceed

Federal District Judge Amos L. Mazzant has denied the U.S. Department of Labor's request to halt proceedings in his court while it appeals the preliminary injunction he granted preventing salary-related changes in the federal Fair Labor Standards Act's "white collar" exemption requirements from taking effect. In the court's view, USDOL failed to demonstrate that such an extraordinary measure was warranted.

The Latest on the Overtime Rule Litigation: District Judge Denies DOL’s Motion to Stay Pending a Ruling by the Court of Appeals

On January 3, 2017, Judge Amos L. Mazzant III issued a Memorandum Opinion and Order in State of Nevada v. United States Department of Labor, denying the U.S. Department of Labor’s (DOL) Motion to Stay Proceedings Pending Appeal of the court’s grant of a nationwide preliminary injunction against the new overtime rule. Judge Mazzant had conducted a telephone conference with the parties regarding the motion on December 30, 2016, and had promised to rule by January 3, 2017.

Back to 1981: More Reasonable Salary Levels for the Overtime Regulations

By almost all accounts, the Trump administration, under the leadership of Secretary of Labor-designate Andrew Puzder, should inherit the part 541 regulations of the Obama administration that dramatically increased the salary amount required for the executive, administrative, and professional (EAP) employee exemptions. Hopefully, the Trump administration will make this rule a high priority and initiate a new rulemaking in January of 2017, so it can establish a more reasonable salary level test that complements the duties tests.

Sen. Sanders, Other Members of Congress, File Amicus Brief in Support of DOL Salary Basis Regulation

Sen. Bernie Sanders, along with twenty-five other members of Congress, have filed an amicus brief in the Fifth Circuit Court of Appeals urging the Court to reverse the injunction issued by a Texas federal judge enjoining enforcement of the Department of Labor’s recent increase to the salary basis threshold for the white collar exemptions under the Fair Labor Standards Act (“FLSA”).

Federal Overtime Rule Injunction Calls for State-Level Attention

Many businesses let out a sigh of relief after a federal judge issued a preliminary injunction1 halting the U.S. Department of Labor’s (DOL) final rule increasing the minimum pay requirements for exempt executive, administrative, and professional employees. The preliminary injunction was issued about a week before the rule was scheduled to take effect on December 1, 2016. The preliminary injunction effectively maintains the status quo under the federal Fair Labor Standards Act (FLSA), which requires that these employees be paid at least $455 per week to maintain their exemption from the FLSA's minimum wage and overtime requirements.

The Overtime Rule Litigation: The Action Continues While the DOL Appeals

Even though the preliminary injunction against implementation of the overtime rule granted by Judge Mazzant is on a fast track appeal in the Fifth Circuit, the activity in the trial court has not ended.

Labor Department Argues That Texas Court Erred When It Blocked Overtime Rule

On December 15, 2016, the U.S. Department of Labor (DOL) filed the opening brief in its appeal of a nationwide preliminary injunction that blocks the agency from implementing its revisions to overtime rules under the Fair Labor Standards Act (FLSA).

Texas AFL-CIO Files Motion to Intervene in DOL Final Rule Lawsuit, Citing Trump Administration’s Anticipated Change of Course

The Texas AFL-CIO recently filed a motion to intervene as a defendant in the action filed against the Department of Labor (DOL) regarding its highly publicized regulation expanding overtime coverage. Fearing the DOL under President-Elect Donald Trump might abandon its appeal to the Fifth Circuit of a nationwide preliminary injunction issued by a Texas District Court judge, the Texas AFL-CIO seeks to defend the Final Rule even if the DOL backs out.

Fifth Circuit Agrees to Fast Track Overtime Appeal

On December 8, 2016, the U.S. Court of Appeals for the Fifth Circuit announced that it will fast track the appeal of a nationwide preliminary injunction that blocks the U.S. Department of Labor (DOL) from implementing its revisions to overtime rules under the Fair Labor Standards Act (FLSA).

Fifth Circuit Grants DOL’S Request For Expedited Briefing of Preliminary Injunction Ruling; Case to Be Fully Briefed by January 31, 2017

In a December 8, 2016 Order, the Fifth Circuit Court of Appeals granted the DOL’s request for expedited briefing of its appeal of the preliminary injunction issued by a district court judge that had enjoined the DOL from implementing its regulation raising the salary level for the white collar exemptions. The Court even set a quicker briefing schedule than DOL had requested in its Motion.

DOL Requests Expedited Ruling on Appeal of Preliminary Injunction, But Appeal Will Not Be Decided Before Trump Administration Under Proposed Schedule

On December 2, one day after filing its appeal of the preliminary injunction blocking its new salary basis regulations, the DOL filed a request for expedited briefing and oral argument in the appeal. The DOL has requested that the Fifth Circuit Court of Appeals set an expedited schedule whereby briefing would be complete on February 7, 2017 and oral argument would occur on the first available date thereafter. According to the DOL, the injunction was issued in error because the Fair Labor Standards Act gives the DOL “broad latitude” to issue regulations defining and delimiting the white collar exemptions, including the salary basis test.

DOL Goes for Round Two in Battle Over Salary Hike

The U.S. Department of Labor isn’t taking "no" for an answer on its attempt to hike the minimum salary required for workers with certain duties to remain exempt from overtime. The agency stated today that it "strongly disagrees" with the Texas federal court’s ruling last week that halted the implementation of the salary increase, covered in our November 23 client alert. A notice of appeal has been filed. We don’t know whether this fight will conclude in the court system or whether the DOL will change its course under the new administration. But it looks like things are about to get interesting and we’ll keep you updated along the way.

Labor Department Seeks to Fast Track Overtime Appeal

On December 2, 2016, the U.S. Department of Labor (DOL) filed a motion with the U.S. Court of Appeals for the Fifth Circuit seeking to fast track the DOL’s appeal of a nationwide preliminary injunction that blocks the agency from implementing its revisions to overtime rules under the Fair Labor Standards Act (FLSA).

USDOL Appeals Last Week's Exemption Ruling (Updated 12 05 16)

UPDATED 12 05 16: The U.S. Department of Labor has urged the Fifth Circuit U.S. Court of Appeals to grant a shorter-than-usual schedule for briefing and to set oral argument "for the first available date after" all briefs have been filed.

DOL Appeals Preliminary Injunction Ruling to Fifth Circuit

On December 1, 2016, the Department of Labor appealed the district court’s preliminary injunction ruling. It is expected that the DOL will request the Fifth Circuit to rule on the appeal quickly, but the Fifth Circuit may not grant this request, and the appeal may not be resolved prior to January 20, 2017. If the appeal is not resolved prior to the Trump Administration, the appeal could be withdrawn by the new administration or legislation passed by the new Congress nullifying the DOL regulation.

USDOL Appeals Last Week's Exemption Ruling

The U.S. Department of Labor has filed its notice to appeal last week's preliminary injunction that prevented the salary-related changes in the federal Fair Labor Standards Act's "white collar" exemptions from taking effect today.

Labor Department Announces Intent to Appeal Preliminary Injunction of Overtime Regulations on the Day the Regulations Were to Become Effective

On December 1, 2016, the U.S. Department of Labor (DOL) filed a notice with the U.S. Court of Appeals for the Fifth Circuit announcing its intent to challenge a Texas district court’s issuance of a nationwide preliminary injunction blocking the implementation of revised overtime regulations under the Fair Labor Standards Act (FLSA). Ironically, December 1 was supposed to be the effective date for the revised regulations, which would more than double the minimum salary requirements for the FLSA’s major white collar exemptions.

Dec. 1 DOL Overtime Rule Blocked: Now What?

Just days before the Department of Labor’s (DOL) final overtime rule was scheduled to go into effect, a U.S. District Judge in the Eastern District of Texas issued a preliminary injunction, blocking the rule from taking effect across the country. Employers now face a number of legal, practical, and morale issues as they await a final decision in the matter.

DOL Issues Response to Recent Injunction Over Overtime Final Rule

Earlier today, the United States Department of Labor issued a written public response on its website to the injunction issued by Judge Mazzant enjoining the enforcement of its Overtime Final Rule, that was set to become effective on Thursday. The DOL response is set forth below and stated:

OT Aftermath: FAQs On How Employers Should Respond To Overtime Rule Decision

Employers are returning from their Thanksgiving holiday weekend grappling with thorny questions following last week’s surprising and momentous court decision preliminarily blocking the Department of Labor’s overtime rule from taking effect. Here are some answers to your most pressing questions from our firm’s thought leaders on the subject.

The DOL Overtime Salary Regulation is Temporarily Enjoined - Now What?

On Tuesday, November 22, 2016, a federal court in Texas issued a preliminary injunction temporarily barring the Department of Labor from implementing the December 1, 2016 salary rate increase for the white collar overtime exemptions. What will happen next is not certain, and depends in part on the Trump administration reaction after the inauguration. Many employers are considering pulling back previously-announced salary increases and re-classifications. When evaluating this option, employers should consider not only the uncertainty of the law at the federal level, but also state-law limitations on an employer’s ability to change pay terms for at-will employees.1

Obama Appointee Trumps Implementation of DOL's Salary Hike

Since 2014, employers have been preparing for, and many have already communicated or implemented, classification and compensation changes to comply with the U.S. Department of Labor's revised regulations, which would double the minimum salary required for certain exempt employees effective December 1, 2016. For more information concerning the changes, see our May client alert on this topic. Yesterday, a federal judge in Texas issued a nationwide preliminary injunction blocking the DOL from implementing the minimum salary hike from $455 weekly ($23,660 annually) to $913 weekly ($47,476 annually). State of Nevada et al. v. U.S. Department of Labor et al., No. 4:16-cv-731 (E.D.Tex. November 22, 2016).

Employers are not yet required to pay overtime in accordance with the revised FLSA regs . . . but proceed with caution.

By now, employers know that on November 22, 2016, federal court Judge Amos Mazzant in Texas issued a preliminary injunction that has blocked – temporarily – the implementation of the revised white collar overtime regulations issued by the Department of Labor (DOL) earlier this year. Those regulations, which have been the focus of concern, controversy, and downright panic, were set to become effective on December 1, 2016.

FLSA Salary Changes Halted For Now

Yesterday afternoon, Texas federal District Judge Amos Mazzant preliminarily enjoined the U.S. Labor Department from "implementing or enforcing" the salary-related changes in the federal Fair Labor Standards Act's "white collar" exemptions that were supposed to take effect on December 1. His decision was made in response to an emergency motion by the 21 states that had filed suit seeking to invalidate the Labor Department's actions.

Court Halts Overtime Rule

A federal court has blocked the new overtime rule from the US Department of Labor (DOL).

Texas Judge Blocks New Overtime Rules That Would Have Increased Exempt Salary-level Threshold

Employers have been busily preparing in anticipation of a December 1, 2016 effective date for new federal regulations established by the Department of Labor (the “DOL”) that would have increased the requisite salary level for employees to qualify as exempt from overtime under the so-called white collar exemptions to the Fair Labor Standards Act (“FLSA”).Yesterday, however, a Texas Judge issued a preliminary injunction blocking the scheduled increase. The injunction, which applies nationwide, was issued in connection with a legal challenge filed by 21 states and numerous business groups in the United States District Court for the Eastern District of Texas.

Federal Court Stops December 1st Implementation of New Overtime Rules

Executive Summary: Employers do not have to make changes to comply with the Department of Labor’s (DOL’s) new overtime regulations by the December 1, 2016 deadline. In a surprising decision, a federal District Court in Texas issued an injunction halting the implementation of the new overtime rules nationwide. If the injunction remains intact when President-elect Trump takes office, it may allow the new administration additional avenues in which to seek to modify, amend or repeal the DOL’s overtime rule, even if further judicial action is not taken to ultimately overturn the regulations.

Texas Court Grants Nationwide Preliminary Injunction Enjoining Department of Labor from Implementing or Enforcing Regulation Raising Salary Level for White Collar Exemptions

When two lawsuits were filed in Texas seeking to block the Department of Labor’s new overtime rule, which more than doubles the required salary level to qualify for the Fair Labor Standards Act “white collar” exemptions, few predicted the lawsuits would be successful. But the polls were wrong (again).

eLABORate: Texas Judge Blocks DOL's New Overtime Rules

A federal judge in the Eastern District of Texas entered a nationwide preliminary injunction yesterday, blocking for now the U.S. Department of Labor (“DOL”) from implementing significant changes to the overtime rules applicable to white collar employees (the “Final Rule”). The Final Rule was set to go into effect on December 1, 2016.

Federal Court Blocks New Overtime Rule

On November 22, 2016, at the request of 22 states and 55 business groups that brought suit as plaintiffs,1 the United States District Court for the Eastern District of Texas issued a preliminary injunction blocking the U.S. Department of Labor's new rule re-defining which employees are exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA).2 The new rule—which was set to take effect on December 1, 2016—would have more than doubled the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). As a practical matter, the impact of this decision by the Texas federal court means that employers do not need to go forward with plans to implement the new rule's requirements in their workplaces.

December 1, 2016 Deadline for Compliance with new Overtime Rules is Now on Hold

In a surprising decision, late Tuesday afternoon a U.S. District Court in Texas granted a nationwide preliminary injunction against implementation of the U.S. Department of Labor’s (DOL) new overtime pay regulations until further order of the court. The regulations were scheduled to go into effect on December 1, 2016.

What Should Employers Do Now That the Overtime Rule Is Blocked?

Now that a federal district court judge has issued a nationwide injunction against the new overtime rules that were to go into effect on December 1, 2016, many employers are asking “what should we do?” Some employers have already prepared to comply with the new regulations and are ready to roll out new payroll practices next month. Do they hold off or press forward?

Texas Judge Temporarily Blocks Overtime Regulations That Were to Become Effective on December 1

On November 22, 2016, a federal court judge in Texas issued a preliminary injunction that temporarily blocks the U.S. Department of Labor (DOL) from implementing and enforcing its revised white collar overtime regulations on a national basis. The regulatory revisions, which would more than double the minimum salary requirements for the major white collar exemptions to the federal Fair Labor Standards Act (FLSA), were set to become effective on December 1, 2016.

BLOCKED! Court Preliminarily Halts Overtime Rules With Last-Minute Ruling

In a dramatic last-minute development, a federal judge in Texas today blocked the U.S. Department of Labor’s (USDOL’s) overtime rule from taking effect on December 1, handing an eleventh-hour victory to employers across the country. Agreeing with arguments posed by concerned states and business groups, the judge issued a preliminary injunction preventing the rules from being implemented on a nationwide basis.

"Fixed Salaries" And FLSA Overtime: Another Misguidance Alert

Employers designing pay plans for employees who are or will be non-exempt should take care not to be misled by murky U.S. Department of Labor "guidance" published in connection with the coming federal Fair Labor Standards Act exemption changes.

The Minimum Wage in 2017: A Coast-to-Coast Compliance Challenge

Minimum-wage-related actions in 2016 will create challenges for employers starting in 2017. Although 2016 was not necessarily a record year for passage of state minimum wage laws in general, it did break ground concerning the number of tiered and/or regional minimum wage laws enacted. This year was also notable in that Iowa joined the list of states with local minimum wage laws.

Labor Department’s ‘Drastic Change’ to ‘White Collar’ Overtime Exemption Rule Troubles Court

For more than three hours on November 16, 2016, Obama-appointed Judge Amos L. Mazzant, III, of the U.S. District Court for the Eastern District of Texas – Sherman Division, heard oral argument on the preliminary injunction to block enforcement of the Final Rule. The court peppered both sides with probing questions during the lengthy argument. Based on the argument, whether a preliminary injunction will be issued appears to be a much closer question than earlier predicted.

Breaking News: Federal Judge Hears Overtime Challenge and Promises to Rule Soon

Revised overtime regulations are still scheduled to take effect on December 1, 2016, but an effort to halt them remains alive. Judge Amos L. Mazzant III, a federal judge for the Eastern District of Texas, held a hearing today on a preliminary injunction motion seeking to stop the revised regulations from taking effect nationwide. After vigorous argument on both sides, Judge Mazzant stated at the end of today’s hearing that he is taking the matter under advisement and intends to rule on the preliminary injunction motion by this coming Tuesday, November 22, 2016.

The New Overtime Pay Rule After the Election

Many employers have asked about the potential impact of the election of Donald Trump on the status of the new overtime pay regulations under the Fair Labor Standards Act (FLSA), which essentially double the minimum salary for most white-collar exemptions to $913 per week (equal to $47,476 annually). While President-elect Trump is expected to pursue policies that are more business-friendly than those of President Obama, employers still need to be prepared to meet the overtime rule’s compliance deadline of December 1, 2016.

Did the DOL Salary Basis Regulations Just Get Trumped?

The U.S. Department of Labor regulations raising the required salary level for the white collar exemptions (executive, administrative, and professional) under the Fair Labor Standards Act are scheduled to become effective December 1, 2016.

Three-Weeks to the Overtime Effective Date: Communicate With Employees Regarding Planned Compensation Changes, Overtime Eligibility

Only three weeks remain until the U.S. Department of Labor’s revised overtime regulations under the Fair Labor Standards Act (FLSA) become effective. With the December 1, 2016, compliance deadline rapidly approaching, employers need to be communicating with employees who will be affected by the overtime changes. In addition, following Tuesday’s surprising presidential election results, employers also should consider refining their communications to take into account potential contingencies.

FLSA Exemption Changes: Do The Election Results Mean, "Never Mind"?

Many employers are wondering whether Donald Trump's election means that they may now forget about the coming changes in the federal Fair Labor Standards Act's "white collar" definitions.

30 Days to Comply with the DOL’s New Overtime Rules: Are You Ready?

Is your organization ready for this change or are you in panic mode? In this podcast you will hear from Littler principal Tammy McCutchen who has been closely monitoring these developments and served as the Department of Labor wage and hour administrator the last time the overtime regulations were revised. Tammy shares her wealth of knowledge and answers frequently asked questions about the Final Rule including:

Got Questions About the New FLSA Overtime Rules? We’ve Got Answers

Barring a last-minute legislative change or court injunction, we’re now just a month away from when the new Fair Labor Standards Act (FLSA) overtime rules take effect on December 1.

New FLSA Overtime Regulations Face Legal Challenges

As employers know, the final rule updating the federal overtime regulations was published in May 2016 and is scheduled to take effect December 1, 2016. The biggest impact of the new rules is the huge increase in the minimum salary required to qualify as exempt from overtime under the FLSA’s executive, administrative, and professional exemptions. Under the new rules, the minimum salary to qualify for exempt status is $47,476 (more than double the existing minimum) and is subject to further automatic increase on January 1, 2020 and every three years thereafter. Industry groups have voiced strong opposition to the new rules, prompting members of Congress to introduce legislation seeking to delay implementation of the new rules by six months. The House passed one such bill, HR 6094. A similar bill has been introduced in the Senate. However, President Obama has already vowed to veto these bills should they reach his desk.

Transitioning To The New "Highly Compensated" Threshold

When the revised requirements for the federal Fair Labor Standards Act's "white collar" exemptions take effect on December 1, the total-annual-compensation threshold for the "highly compensated employee" (HCE) versions will increase from $100,000 to $134,004. This raises the question of what actual total annual dollar amount will be necessary for the transition period, that is, for the timeframe in which the change occurs.

Blocking the New Overtime Salary Threshold? Hearing on Request for an Injunction Scheduled for November

A hearing has been scheduled for November 16, 2016 in a Texas federal court to decide whether an injunction will be issued to block the substantially increased salary threshold to qualify as exempt under the new overtime rule, which is anticipated to take effect on December 1, 2016.

Adapting to the New Department of Labor's Final Rule

The Department of Labor (DOL) Final Rule promulgated new regulations that went into effect on December 1, 2016. All employers need to know how these regulations have changed the test for exemption to understand what they need to do in response. This article will review the basics for the most common exemptions from overtime under Federal law and will also provide an executive summary of the key changes made by the Final Rule.

Court Will Consider States' Request to Pause FLSA Overtime Rule

A federal court on October 17 agreed to hear a motion filed by 21 states asking the court to temporarily suspend upcoming overtime rules from the US Department of Labor (DOL).

The Looming December 1 Implementation Date for the Overtime Regs: Do Recent Challenges Mean a New Effective Date?

One question being asked by employers on a nearly daily basis is, “Do we really have to meet the December 1, 2016 effective deadline for the revisions to the U.S. Department of Labor’s (DOL) overtime regulations?” The short answer is: Yes.

December 1, 2016 implementation date for overtime regs remains unchanged. Are you ready?

One question is being asked by employers on a nearly daily basis: “Do we really have to meet the December 1, 2016 effective deadline for the revisions to the U.S. Department of Labor (DOL) overtime regulations?” Short answer is: Yes.

Tolerating Poor Performance Can Bolster Exemption Challenges

Employers generally appreciate the importance of promptly, effectively, and consistently addressing an employee's inadequate performance. Not doing so can adversely affect productivity and workplace morale, can establish bad precedent, and can make future discipline problematic.

House of Representatives Passes Bill to Delay Overtime Rule Effective Date

On September 28, 2016, the U.S. House of Representatives passed H.R. 6094 Regulatory Relief for Small Businesses, Schools, and Nonprofits Act by a vote of 246 to 177. This bill would delay the December 1, 2016 effective date of the new salary level test in the final overtime rule for six months until June 1, 2017.

House Votes to Delay OT Rule But Employers Are Not Out of the Woods Yet

Yesterday, the United States House of Representatives passed a bill, H.R. 6094 (the “bill” referred to as the Regulatory Relief for Small Businesses, Schools and Nonprofits Act), that would delay the effective date of the Department of Labor’s new overtime rule by 6 months, from December 1, 2016 to June 1, 2017. The Vote passed the House 246-177, with 5 Democrats voting in favor of it. This is just the latest challenge to the DOL’s doubling of the minimum salary threshold for the white collar exemptions (executive, administrative, and professional) under the Fair Labor Standards Act. Business groups, congressional Republicans and State Officials have all criticized the drastic economic impact such a measure would have on businesses.

Keep Calm And Carry On: Part 2

The December 1 effective date for the increased dollar-amount thresholds for most of the federal Fair Labor Standards Act's so-called "white collar" exemptions is now only a little more than two months away.

States and Business Groups File Lawsuits Seeking to Block DOL’s ‘White Collar’ Overtime Rule

Twenty-one states, led by Texas and Nevada, have filed a lawsuit against the Department of Labor seeking a preliminary and permanent injunction declaring unlawful the DOL’s Final Rule amending the overtime exemption for executive, administrative, and professional employees (the “white collar” exemptions) under the Fair Labor Standards Act.

FLSA "White Collar" Exemption Changes Challenged

Twenty-one states are challenging the U.S. Labor Department in court in an effort to stop or delay the impending increases to the dollar-amount thresholds for most of the federal Fair Labor Standards Act’s so-called "white collar" exemptions. The plaintiff states raise various arguments opposing the changes, in particular focusing on the application to public employers and future automatic updates. Merely hours later, numerous business groups filed a somewhat similar suit in the same district court on behalf of their members.

September Surprise? Two Federal Lawsuits Attack the Validity of the New FLSA Overtime Rule.

The effective date for the revisions to the U.S. Department of Labor (DOL) overtime regulations is less than 80 days away, and employers continue to struggle with the challenges created by changes to the existing rule. On September 20, 2016, federal court lawsuits were filed by two disparate groups, each attempting to put off or halt the implementation of the revisions.

Overtime Rule Target of Lawsuit by 21 States

Several states today filed a lawsuit asking a federal court to nullify new Fair Labor Standards Act (FLSA) overtime regulations from the US Department of Labor (DOL) before they take effect December 1.

Whom Does USDOL's Salary Increase Not Affect?

There appears to be some continuing misunderstanding about exactly which exempt employees might be affected by the December 1 increase in the minimum salary amount required to meet the basic compensation criterion for an executive, administrative, professional, or derivative exemption under the federal Fair Labor Standards Act's Section 13(a)(1).

Is Proposed Legislation Likely To Slow Implementation of The New Overtime Regulations? Probably Not.

On May 18, 2016, the U.S. Department of Labor (DOL) announced the publication of its final rule updating its existing overtime regulations. The updated regulations are scheduled to become effective on December 1 of this year and are predicted to extend overtime pay protections to over 4 million workers within the first year of implementation. The updates include a provision under which employees are eligible for overtime compensation if they work over 40 hours in a week and earn less than $47,476 per year—an over 100 percent increase from the current salary threshold of $23,660.

"White Collar" Exemption Changes: Keep Calm And Carry On

Recent Congressional initiatives have targeted the impending increases in the U.S. Labor Department's dollar-amount thresholds for most of the federal Fair Labor Standards Act's so-called "white collar" exemptions.

FAQs on the Final Overtime Regulations

On May 18, the U.S. Department of Labor’s (DOL) Wage and Hour Division released the new final overtime rule. The new minimum salary level for the executive, administrative, and professional employee exemptions under the Fair Labor Standards Act (FLSA) will be $913 per week, or $47,476 per year, under final regulations. This new salary threshold—which will become effective on December 1, 2016—more than doubles the current minimum salary level of $455 per week, or $23,660 per year and will have a dramatic impact on employers. Below are answers to some frequently asked questions about the new rule.

Lawmakers Introduce Legislation to Phase In New Overtime Exemption Regulations

A group of Democratic lawmakers (yes, you read that right) have introduced legislation aimed at easing the sting of the new federal overtime exemption regulations that currently are slated to take effect December 1, 2016. Under the new regulations, the minimum annual salary to qualify for exempt status increases over 100% from $23,660 to $47,476. Under proposed legislation dubbed the Overtime Reform and Enhancement Act, implementation of the new overtime regulations would be revised to gradually phase in the salary increase over three years, beginning with a 50% increase to $35,984 effective December 1, 2016. In subsequent years, the minimum salary threshold would increase as follows:

Share FAQs on the Final Overtime Regulations

On May 18, the U.S. Department of Labor’s (DOL) Wage and Hour Division released the new final overtime rule. The new minimum salary level for the executive, administrative, and professional employee exemptions under the Fair Labor Standards Act (FLSA) will be $913 per week, or $47,476 per year, under final regulations. This new salary threshold—which will become effective on December 1, 2016—more than doubles the current minimum salary level of $455 per week, or $23,660 per year and will have a dramatic impact on employers. Below are answers to some frequently asked questions about the new rule.

Is proposed legislation likely to slow the implementation of the new overtime regulations? Probably not.

On May 18, 2016, the Department of Labor (DOL) announced the publication of a final rule, updating its existing overtime regulations. The updated regulations are scheduled to become effective on December 1 of this year and are predicted to extend overtime pay protections to over 4 million workers within the first year of implementation. The updates include a provision under which employees are eligible for overtime compensation if they work over 40 hours in a week and earn less than $47,476 per year – an over 100% increase from the current salary threshold of $23,660.

Gig Employer Heartburn: Challenge to GrubHub’s Classification System Continues

A putative class action case, alleging that online food delivery service GrubHub misclassified its drivers, has survived a motion to dismiss and will proceed in California federal court. Noting that GrubHub’s view of the facts may ultimately prevail, U.S. Magistrate Judge Jacqueline Scott Corley said that at this stage, the drivers’ pleadings gave rise to “plausible inference” that they should not have been classified as independent contractors, and thus may have impermissibly been denied minimum wage and overtime pay.

New DOL "White Collar" Overtime Exemptions Rule to be Put on Hold in Puerto Rico Under PROMESA

On June 30, 2016, President Obama signed the Puerto Rico Oversight, Management, and Economic Stability Act (S. 2328), commonly known as “PROMESA.” This measure, which was enacted with bipartisan support, effectively delays application of the U.S. Department of Labor's (DOL) new overtime rule to employees in Puerto Rico.

Department of Labor’s New Overtime Final Rule Carries Class Action Risk

The U.S. Department of Labor’s new Final Rule as to the Fair Labor Standards Act’s “white collar” exemptions to overtime could open employers up to class action liability as previously exempt employees fail to meet new salary requirements.

Jocks and Docs: Classifying Postdocs and Coaches Under the DOL’s New Rules

On May 18, 2016, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) issued its final rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees,” under the Fair Labor Standards Act (FLSA). The rule does several key things:

What are the Most Significant Changes the DOL Made to the FLSA's White Collar Overtime Regulations?

The U.S. Department of Labor (DOL) published the final rule revising the “white collar” overtime exemption regulations on May 18, 2016. This publication was the result of a process that began in March 2014 when President Obama directed the Secretary of Labor to review and “modernize” the current overtime regulations. In the final rule, the DOL estimates that the changes will impact 4.2 million white collar workers.

Will the DOL’s Final Rule Amending Overtime Regulations for ‘White Collar’ Workers Apply to Puerto Rico?

On the same day the U.S. Department of Labor released its Final Rule updating regulations under the Fair Labor Standards Act (“FLSA”) governing overtime exemptions for executive, administrative, and professional employees (commonly known as the “white collar exemptions” or “EAP exemptions”), a bill was introduced in the U.S. House of Representatives that would delay implementation of the Final Rule in Puerto Rico for at least two years after enactment of the bill, until certain conditions are met. (For details on the Final Rule, see our article, Labor Department Announces Final Rule Amending Overtime Regulations for ‘White Collar’ Workers.)

Should we really be this panicked about the DOL overtime regs? Probably not.

By now, everyone is aware that on May 18, 2016, the Department of Labor (DOL) issued its final rule updating the Fair Labor Standards Act (FLSA) overtime regulations. (Defining and Delimiting the Exemptions or Executive, Administrative, Professional, Outside Sales and Computer Employees.) Since then, there have been dozens of helpful articles, analyses, explanations, and in-person and electronic trainings to explain the rule. Panic is rampant, as employers attempt to understand the change to the regulations. But stay calm – it’s not that complicated.

How Rising Minimum Wages Will Tie Employers’ Hands on New Overtime Rules

The increase in state and local minimum wages will limit the range of responses employers will have available to comply with the new Fair Labor Standards Act (FLSA) overtime rules.

New Minimum Salary Rule Holds Surprises for Employers – and They're Not All Bad

After more than two years of publicity and tremendous speculation surrounding what the new overtime regulations of the Fair Labor Standards Act ("FLSA") would look like after President Obama directed the Secretary of Labor to "modernize and streamline" them, the final version of the rule is finally here – and now the work really begins for employers. By now, we’re all familiar with the reasons behind the changes (but if you’re not, you can see our article here that links back to three earlier articles on the topic). So, let’s get to the nitty gritty of the actual changes to the overtime rule and what they mean for you.

U.S. Department of Labor Publishes Final Rule on FLSA Overtime Regulations

On May 18, 2016, the U.S. Department of Labor published its Final Rule updating the Fair Labor Standards Act (“FLSA”) overtime regulations regarding the executive, administrative and professional exemptions (the “FLSA White Collar Exemptions”). The Final Rule does not make any changes to the outside sales or computer professional exemptions.

U.S. Department of Labor Publishes Final Rule on FLSA Overtime Regulations

On May 18, 2016, the U.S. Department of Labor published its Final Rule updating the Fair Labor Standards Act (“FLSA”) overtime regulations regarding the executive, administrative and professional exemptions (the “FLSA White Collar Exemptions”). The Final Rule does not make any changes to the outside sales or computer professional exemptions.

Employment Law Update - Changes to the Overtime Pay Rules are Here

On May 18, 2016, the U.S. Department of Labor (DOL) issued its final rule on changes to four exemptions to the overtime pay requirement of the Fair Labor Standards Act (FLSA): the executive, administrative, and professional (EAP) exemptions and the highly compensated employee exemption.

Retail and Hospitality Employers Grapple With the DOL's Final FLSA Part 541 Regulations

For over a year, retail and hospitality employers have been anxiously awaiting the issuance of the U.S. Department of Labor’s (DOL) final overtime regulations—regulations which many had predicted would impact retail and hospitality employers more than most. Among their biggest fears was that the DOL would make changes to the duties test, increase the salary minimum to the highest level contemplated, and simultaneously disallow inclusion of bonuses to meet the salary minimum. Luckily, the DOL decided not to include any of those proposed changes in the final regulations. However, the changes that retail and hospitality employers will be required to implement by December 1, 2016 are expected to impact retail and hospitality businesses in a profound and negative way. According to David French, senior vice president for government relations at the National Retail Federation, a major industry group representing retailers and chain restaurants, “DOL’s new overtime rules are a massive failure. They are a failure of the regulatory process. They are a failure to listen. And, most of all, they are a failure to face reality.”

ESL Teachers At Private Learning Center FLSA “Teachers” Exempt from Overtime

Earlier this week, in a matter of first impression within the Second Circuit, Judge P. Kevin Castel of the Southern District of New York held that employees who teach English as a second language (“ESL”) at a privately-owned ESL learning center qualify for the professional exemption under the FLSA as “teachers.” Fernandez v. Zoni Language Ctrs., 2016 U.S. Dist. LEXIS 65310 (S.D.N.Y. 2016).

Senator Lamar Alexander to Introduce Resolution to Block Labor Department’s Overtime Rule

Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-Tenn.) has announced that he will soon introduce a Congressional Review Act resolution to block implementation of the Department of Labor’s final overtime rule. (For details of the Final Rule, see our article, Labor Department Announces Final Rule Amending Overtime Regulations for ‘White Collar’ Workers.)

eLABORate: Breaking Down the DOL's Final Rule Expanding Overtime Eligibility

Today the U.S. Department of Labor (DOL) issued its much-anticipated final rule updating the regulations applicable to white collar exemptions. The changes set forth in the final rule go into effect December 1, 2016. The DOL estimates that, absent employer action, the change will entitle more than 4 million white collar workers currently classified as exempt to overtime eligibility.

How Will the New Overtime Regulations Affect Healthcare Employers?

The long-awaited U.S. Department of Labor (DOL) regulations on the “white collar” exemptions are finally here. As per the regulations, which are to be issued on May 18, 2016, the new minimum salary level for the executive, administrative, and professional employee exemptions under the Fair Labor Standards Act (FLSA) will be $913 per week, or $47,476 per year. This new salary threshold—which will become effective on December 1, 2016—more than doubles the current minimum salary level of $455 per week, or $23,660 per year, and will have a dramatic impact on all employers, including those in the healthcare industry.

Storm Clouds and Silver Linings for Employers: An Analysis of the DOL’s Final FLSA Part 541 Regulations

The minimum salary threshold to qualify for the executive, administrative, and professional exemptions to the Fair Labor Standards Act (FLSA) will more than double on December 1, 2016, from $23,660 per year to $47,476 per year. This is the most notable—but not the only – change to the FLSA exemption requirements under the final Part 541regulations that the U.S. Department of Labor (DOL) released today. Another noteworthy provision in the final Part 541 rule is one to automatically adjust this salary amount every three years beginning on January 1, 2020.

DOL's New Overtime Rule: Ready or Not, Here It Comes

The U.S. Department of Labor has issued its Final Rule setting forth a new salary threshold for the white collar exemption to the minimum wage and overtime requirement of the Fair Labor Standards Act. Effective December 1, 2016, the standard salary threshold for the white collar exemption will increase from $455 per week ($23,660 per year) to $913 per week ($47,476 per year), making an estimated 4.2 million American workers eligible for overtime when they work more than 40 hours in any work week. The DOL predicts that this change will result in more than $1.2 billion in additional wages paid to employees each year.

DOL's Final Rule Expands Overtime Eligibility for Millions of Workers

Executive Summary: Today, the U.S. Department of Labor (DOL) will publish its long-awaited Final Rule amending the "white collar" exemption tests for executive, administrative, and professional employees (located in 29 CFR Part 541) under the Fair Labor Standards Act (FLSA). These new regulations increase the threshold minimum salary to $913 per week ($47,476 annually), doubling the annual salary previously required for an employee to be considered exempt from overtime under the FLSA's white collar exemptions. The regulations also increase the minimum salary threshold under the "highly-compensated" exemption to $134,004 annually. Although the Final Rule does not change the current duties test, it contains a mechanism to automatically adjust the minimum salary thresholds every three years. The regulations are to become effective by December 1, 2016.

Labor Department Announces Final Rule Amending Overtime Regulations for ‘White Collar’ Workers

The U.S. Department of Labor has released its long-awaited Final Rule updating regulations under the Fair Labor Standards Act governing overtime exemptions for executive, administrative, and professional employees, commonly known as the “white collar exemptions” or “EAP exemptions.” The Final Rule is scheduled to be published in the Federal Register on May 23, 2016.

U.S. Department of Labor Publishes Final Rule on FLSA Overtime Regulations

On May 18, 2016, the U.S. Department of Labor published its Final Rule updating the Fair Labor Standards Act (“FLSA”) overtime regulations regarding the executive, administrative and professional exemptions (the “FLSA White Collar Exemptions”). The Final Rule does not make any changes to the outside sales or computer professional exemptions.

New Exemption Rules Finally Arrive: Employers Should Prepare For The Impact

The U.S Labor Department (USDOL) has finally released the anxiously awaited revised regulations affecting certain kinds of employees who may be treated as exempt from the federal Fair Labor Standards Act's (FLSA) overtime and minimum-wage requirements. These will be published officially on May 23, 2016.

USDOL Releases Details On Exemption Revisions

At long last, the U.S. Labor Department has disclosed the details of its final revised regulations defining the executive, administrative, professional, "outside salesman", and derivative exemptions under the federal Fair Labor Standards Act's Section 13(a)(1).

FLSA Overtime Rule to Take Effect December 1, Salary Minimum Will Be $47,476

The minimum salary for many overtime-exempt employees will roughly double from $23,660 to $47,476 under new Fair Labor Standards Act (FLSA) regulations that will take effect December 1.

DOL’s Final Overtime Rule Is Released

Today, the Obama administration and Secretary of Labor Perez announced the publication of the Department of Labor's final rule updating the overtime regulations under the FLSA. The final rule increases the minimum salary to qualify for the white-collar exemptions from $455 per week to $913 per week ($47,476 annually). This is slightly less than the increase to $50,440 the DOL had earlier proposed. Under the final rule, the minimum salary to qualify for the FLSA's highly compensated employee exemption will rise from $100,000 to $134,004 (higher than had earlier been proposed by the DOL). These salary thresholds are further subject to automatic increases every three years, beginning January 1, 2020. Notably, under the new rules, employers may use non-discretionary bonuses and incentive payments (including commissions) that are paid quarterly or more frequently to the employee, to satisfy up to 10% of the minimum salary threshold. The new rule further amends the regulations to provide as follows: "If by the last pay period of the quarter the sum of the employee’s weekly salary plus nondiscretionary bonus, incentive, and commission payments received does not equal 13 times the weekly salary amount required by § 541.600(a), the employer may make one final payment sufficient to achieve the required level no later than the next pay period after the end of the quarter. Any such final payment made after the end of the 13-week period may count only toward the prior quarter’s salary amount and not toward the salary amount in the quarter it was paid." The effective date of the final rule (when employers must comply with the new salary thresholds for exempt employees) is December 1, 2016. The final rule does not include any changes to the duties tests, despite the DOL having solicited input on whether such changes should be made. California employers should note that the new minimum salary threshold for exempt status under the FLSA is now even higher than the exempt salary threshold under California law (currently $41,600, increasing to $43,680 on January 1, 2017). California employers will have to ensure that their exempt employees meet the higher salary threshold under the FLSA, while also meeting California's stricter duties test (which requires an employee to spend more than 50% of his or her time on exempt duties). Additionally, it is not clear whether California will adopt the new federal regulation allowing employers to count non-discretionary bonuses and incentive payments toward satisfying the minimum salary threshold. Currently, there is no such provision under California law. Finally, employers are reminded that California, unlike the FLSA, does not recognize a "highly compensated employee exemption" that allows an employer to treat an employee as exempt based solely on the employee's compensation level and without regard to whether the employee spends more than 50 percent of his or her time on exempt duties. Employers should review their exempt classifications to ensure that employees meet the new minimum salary threshold. Employers may need to increase salary to retain exempt status or reclassify employees to non-exempt if their salary is below the new threshold.

The DOL's New Final Overtime Rule Is Likely To Be Released on Wednesday

The U.S. Department of Labor’s (DOL) Wage and Hour Division delivered its proposed final revisions to the Fair Labor Standards Act’s (FLSA’s) Part 541 overtime regulations to the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB) two months ago. Reports have now emerged that the final overtime rule will be released to the public on Wednesday, May 18, 2016.

Details of New Overtime Exemption Rules Begin To Emerge

Bloomberg BNA is reporting (subscription required) that according to a “source familiar with the situation,” the DOL’s new overtime exemption rules will take effect on December 1. The new minimum salary for exempt executive, administrative and professional employees will be $913 per week or $47,476 per year. That’s still more than double the current $455 per week, but less than the original proposal which would have boosted the minimum to a projected $970 per week for 2016, or about $50,440 per year.

DOL Announces Salary Threshold

News outlets are reporting that the new salary basis rule will take effect on December 1, 2016, and require a salary of $47,476 per year ($913/week). Reports also indicate that the new rule will require an update of the salary threshold every three years, as opposed to annual increases. This effective date provides employers a longer period to analyze and comply with the new rule than previously anticipated, as prior reports had indicated the rule might take effect as early as 60 days after publication.

Counting Bonuses Toward the New FLSA Salary Level: Much Ado About Nothing or Radical Break From the Past?

To qualify for the executive, administrative, and professional exemptions from the overtime requirements of the Fair Labor Standards Act (FLSA), usually an employee must pass each of three tests:

The New DOL White Collar Exemption Regulations, Reclassification and Messaging

By now, most employers are aware that new DOL regulations concerning white collar exemptions to the Fair Labor Standards Act are imminent. The DOL’s final regulations may introduce sweeping changes that will affect employers and employees nationwide, possibly allowing as few as 60 days to comply. Littler shareholders Rich Black and Josh Waxman discuss the potential new regulations and the importance of internal communications and messaging associated with the new regulations and any resulting reclassification.

OIRA’s Review of the Final Overtime Regs Draws to a Close: Will It Include a Provision to Increase the Salary Automatically?

As the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget concludes its review of the proposed final overtime regulations, the issuance of new regulations defining and delimiting the executive, administrative, professional, outside sales, and computer employee exemptions by the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) are imminent. As of Thursday, May 12, 2016, OIRA had conducted some 51 meetings with interested stakeholders including businesses, business and employer associations, employee advocates, institutions of higher learning, and a variety of nonprofit interests. The general consensus continues to be that the final Part 541 rules will dramatically increase the salary level required for exemption by at least doubling the current salary of $455 per week or $23,660 per year. The most recent suggestion is that the new salary threshold for exemption may be around $47,000 per year.

Littler Principal Tammy McCutchen Highlights the Flaws in the DOL's Proposed Overtime Rules to Senate Small Business Committee

With publication of the Department of Labor's final overtime rule imminent, Littler Principal Tammy McCutchen testified before the Senate Committee on Small Business and Entrepreneurship on May 11, 2016, about how the proposed changes will disproportionately and negatively impact small businesses and nonprofit entities. McCutchen (who was the DOL's Wage and Hour Administrator from 2001 to 2004 and oversaw the last amendment to the Fair Labor Standards Act's overtime rules), fielded questions about the DOL's proposed 113% increase in the minimum salary level triggering the "white collar" exemption, possible automatic increases to this level, and the rulemaking process itself.

Major Changes To The "White Collar Exemptions" Are Coming Any Day Now - Are You Ready?

Employers take notice – the federal Department of Labor (“DOL”) is working on a rule change which will significantly affect employees’ exemption from minimum wage and overtime requirements. The new rule is expected to more than double the minimum salary level required for the “white collar” exemptions to apply. This will likely mean increased costs for employers.

Is the DOL’s Final Rule Only Days Away?

The wait is nearly over to find out what the Department of Labor’s final rule revising white collar overtime exemption regulations will require. In this podcast, Littler shareholder, Tammy McCutchen, Esq., discusses the likelihood of different changes, as well as the potential timing of the Final Rule and its impact on employers. Tammy explores the following frequently asked questions:

"White Collar" Exemption Evaluation

It has been more than two years since President Obama directed the U.S. Labor Department to "propose revisions to modernize and streamline" the regulatory definitions of the federal Fair Labor Standards Act's Section 13(a)(1) executive, administrative, professional, outside-sales, and derivative exemptions.

Retailers Share Struggles and Strategies in Preparing for Overtime Changes

The proposed changes to the Fair Labor Standards Act’s (FLSA) overtime rules were a hot topic on the minds of retailers at the National Retail Federation’s Committee on Employment Law meeting, which was held on April 21–22, 2016. At the conference, Elizabeth S. Washko, Office Managing Shareholder of Ogletree Deakins’ Nashville office, moderated a panel discussion on what retail companies are doing now to prepare for the coming changes to the FLSA’s overtime regulations. On the panel with Washko were in-house counsel from four major retailers with operations throughout the United States, representing both brick-and-mortar, as well as online, retailers. Representatives from other retailers in the audience also shared their concerns and tactics. During the lively panel discussion, the presenters fielded the following questions from the moderator and shared the struggles they face as well as their strategies to handle the forthcoming regulations:

HR Intel: Uber-Anxiety over Employee Classification and Overtime

With the public release of the new Department of Labor rule regarding employee classification and overtime around the corner, there is a lot of uncertainty out there in the HR world. Some of the uncertainty focuses on the size of the impact – just how much will our payroll change if this goes into effect? But the primary source of uncertainty seems to be whether the DOL’s “final rule” will actually become final. We’ve heard quite a bit about the new (supposedly) “final” rule, but the process by which it becomes finalized is fairly cryptic.

Countdown to the Final Overtime Rule: The Clock Is Ticking on Your Current Exemptions

On March 15, 2016, the U.S. Department of Labor’s (DOL) Wage and Hour Division delivered its proposed final revisions to the Fair Labor Standards Act’s Part 541 overtime regulations to the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB). Until then, the assumption was that the final revisions to the overtime regulations would be published in July of 2016—namely because, in November of 2015, the DOL issued its Fall 2015 Semiannual Regulatory Agenda, which included a statement indicating that the DOL expected to publish the final rule in July.

Salary Threshold To Be Approximately $900?

According to Bloomberg BNA, reports are that the new minimum salary for the federal Fair Labor Standards Act's Section 13(a)(1) "white collar" exemptions will annualize to "about" $47,000.

Ready For The Looming Exemption Changes?

The publication date for the U.S. Labor Department's revised federal Fair Labor Standards Act's Section 13(a)(1) "white collar" exemption definitions remains uncertain. But a growing consensus is that they are likely to be released within the next four weeks or so.

Classification Headaches? XpertHR Has the Remedy

It is often said that “good things come to those who wait.” However, when it comes to wage and hour compliance, it is becoming increasingly clear the time to act is now. In fact, waiting could put an employer in the undesirable position of drawing attention to itself in an arena where regulators and plaintiffs’ lawyers have never been more eager to pounce on mistakes – no matter how inadvertent – regarding how a company hires, engages and pays those performing services for them.

Fourth Circuit Holds Insurance Fraud Investigators are Not Exempt from Overtime Pay, Creating Circuit Split

Disagreeing with a sister circuit, the U.S. Court of Appeals for the Fourth Circuit has held that insurance fraud investigators were misclassified as exempt from overtime pay under the administrative exemption of the Fair Labor Standards Act, signaling that it will construe the exemption narrowly. Calderon v. GEICO General Insurance Co., 2015 U.S. App. LEXIS 22546 (4th Cir. 2015).

"The Online Exemption Checklist Says . . ."

Coming changes in at least some of the U.S. Labor Department's definitions for the federal Fair Labor Standards Act's Section 13(a)(1) "white collar" exemptions are leading employers to evaluate whether employees they treat as exempt meet all of the duties-related requirements.

Wynn Marketing Executive Host Is Exempt Administrative Employee Due To Exercise of Discretion

Earlier this week, the U.S. Court of Appeals for the Ninth Circuit issued an unpublished decision affirming summary judgment in favor of Wynn Las Vegas with respect to overtime claims asserted by a Slot Marketing Executive Host. Dannenbring v. Wynn Las Vegas, LLC, 2016 U.S. App. LEXIS 5715 (9th Cir. Nev. Mar. 28, 2016).

Get Ready: USDOL Sends Final White Collar Exemption Rule to OMB – Could be Published in 30 to 60 Days

Executive Summary: On Tuesday, March 15th, the US Department of Labor (DOL) sent to the White House's Office of Management and Budget (OMB) its Final Rule revising the White Collar Exemption Regulations, which will likely expand overtime eligibility for millions of workers. Typically, the OMB review takes anywhere from 30 to 60 days. Therefore, the Final Rule could be published at any time in the next couple of months.

DOL's White Collar Overtime Rule Advances

Despite significant concern from some lawmakers and the business community, the Department of Labor sent its final rule revising white collar overtime exemption regulations to the White House Office of Management and Budget (OMB) on Monday. OMB review is the last step in the regulatory process before publication in the Federal Register. The average review period typically lasts four to six weeks, which could mean the final rule will be published this spring, as opposed to around Labor Day, the target date many Hill watchers had assumed.

Update - DOL's Final White Collar Exemption Rule Could Be Published Earlier Than July 2016

As discussed in our February 17 Alert, http://www.fordharrison.com/usdol-says-final-rule-will-be-published-in-july-2016-and-be-effective-within-60-days, employers should be prepared for implementation of the U.S. Department of Labor's (DOL) Final Rule revising its White Collar Exemption Regulations. While it appeared from comments made at the American Bar Association's (ABA) Midwinter Meeting of the Federal Labor Standards Legislation Committee that the Final Rule should be published in July 2016, DOL Solicitor of Labor M. Patricia Smith later clarified that the Final Rule could be published in or before July and will take effect at least 60 days later.

Continued Controversy Surrounding The Proposed New Overtime Rule

Since June, we have written a number of posts covering the Department of Labor’s proposed new overtime rule (see our posts here), and the more than doubling of the salary level threshold for white collar exempt positions. The proposed increase in the salary threshold was quite polarizing and resulted in nearly 300,000 comments.

DOL Says Final Rule Will Be Published in July 2016 and Be Effective Within 60 Days

During today's session of the 2016 American Bar Association's (ABA) Midwinter Meeting of the Federal Labor Standards Legislation Committee, the U.S. Department of Labor (DOL) Solicitor of Labor M. Patricia Smith announced that the DOL's Final Rule regarding the Fair Labor Standards Act (FLSA) White Collar Exemption Regulations will be published in July 2016, with an effective date of 60 days later. This timeline is consistent with the DOL's semi-annual regulatory agenda released late last year, which also proposed a July 2016 Final Rule timetable.

Exemption Regulations Update: Probable July Release

Reports are that U.S. Solicitor of Labor M. Patricia Smith said again today that the U.S. Labor Department's revised regulatory definitions of the federal Fair Labor Standards Act's Section 13(a)(1) exemptions will be released in July.

House Members Oppose Exemption Changes

Some members of the U.S. House of Representatives have written to Labor Secretary Labor Tom Perez to express concerns about the U.S. Labor Department's proposed revisions in its regulatory definitions of the federal Fair Labor Standards Act's Section 13(a)(1) exemptions.

DOL Issues Guidance on Joint Employment under FLSA

The Department of Labor's Wage & Hour Division (WHD) has issued an Administrator's Interpretation (AI)1 establishing new standards for determining joint employment under the federal Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). While it remains to be seen how much deference will be accorded such sub-regulatory guidance,2 the WHD will likely use the AI as justification for charging a greater number of employers with violations of these statutes on the grounds they are joint employers with the offending entity.

Finalized Exemption Changes By Spring 2016?

The U.S. Labor Department is looking to a spring 2016 date for publishing the "Final Rule" revising the regulations defining the federal Fair Labor Standards Act's Section 13(a)(1) exemptions according to a recent report. It appears that USDOL is again revising its stated timeframe to come more in line with the timeframe we previously anticipated. Stakeholders speculate that an earlier date could help ensure that any Congressional Review Act challenge is resolved under President Obama.

Quick Quiz Answer: Part-Time Exempt Status November 13, 2015 03:43

The answer to our November 6, 2015 Quick Quiz is, "No". Under the new arrangement, Bigtown Computer Corporation could not continue to treat Tom as being exempt from the federal Fair Labor Standards Act's minimum-wage and overtime requirements.

eLABORate: ABA Panel Discussion Provides Insight Into The Department of Labor's Proposed Rule on the FLSA's White Collar Exemptions

On November 5, 2015, at the American Bar Association’s Ninth Annual Labor and Employment Law Conference (“Conference”), the U.S. Department of Labor’s (“the Department”) Solicitor (i.e., lead litigation attorney), M. Patricia Smith, participated in a panel discussion with attorneys representing employers (Dennis McClelland of Phelps Dunbar and Elizabeth Lawrence of Honeywell International Inc.) and employees (Gregory McGillivary and Laura Ho), to address the Department’s plans to finish revising the Department’s regulations on the “white collar” exemptions to the Fair Labor Standards Act’s (“FLSA”) overtime pay provisions. The white collar exemptions generally permit employers to pay certain employees on a salary, as opposed to hourly, basis, without having to pay overtime. To take advantage of the exemptions, the employer typically must show that the employee is paid at least a certain threshold salary (“the salary basis test”) and has a primary duty that meets certain requirements set forth in Department regulations (the “duties test”). The duties test is qualitative, in that it evaluates what the most important duty of the employee is, as opposed to relying on a purely numerical threshold.

Quick Quiz: Part-Time Exempt Status

Tom is the Department Manager for Bigtown Computer Corporation's ten-employee Research and Development department. Bigtown treats him as being exempt from the federal Fair Labor Standards Act's minimum-wage and overtime requirements, and Tom's actual duties and responsibilities as a full-time employee clearly meet all of the requirement's for the FLSA's executive exemption. Bigtown also pays Tom bi-weekly on a salary basis at a rate of $850 a week.

Federal Court Finds Intrastate Travel Part of “Stream of Commerce,” Applies Motor Carrier Exemption to Truck Driver

Although applicability of the Motor Carrier Act (MCA) exemption from overtime is predicated on “interstate commerce,” interstate commerce can include wholly intrastate travel by a covered employee when shipped in a “practical continuity of movement” across state lines. A new opinion highlights this doctrine. Kennedy v. Equity Transp. Co., 2015 U.S. Dist. LEXIS 143565 (N.D.N.Y Oct. 22, 2015).

When Will The Exemption Changes Occur?

One of the most-pressing questions for employers at the moment is when the U.S. Labor Department will finalize changes in its definitions of the federal Fair Labor Standards Act's Section 13(a)(1) exemptions.

Court Finds Commissioned Jewelry Salesman Qualifies For Outside Sales Exemption Based On His Own Complaint’s Allegations

Because most FLSA exemptions are affirmative defenses, their applicability is not often established by the Plaintiff’s Complaint, of which s/he is “master” and can shape to avoid addressing exemption-triggering duties. There are exceptions. In a recent opinion, a Manhattan federal district judge ruled that a commissioned salesman who traveled from his home office to conduct jewelry sales at customers’ places of business qualified as an exempt outside salesperson under the FLSA and New York Labor Law based on his own Complaint’s allegations. Cangelosi v. Gabriel Bros, Inc., 15-cv-3736 (JMF), 2015 U.S. Dist. LEXIS 140579 (S.D.N.Y. Oct. 15, 2015).

Firm Critiques USDOL's Exemption Initiative

Last Thursday, Fisher & Phillips filed its own extensive comments on the U.S. Labor Department's proposals and requests relating to the federal Fair Labor Standards Act's Section 13(a)(1) exemptions.

On Second Thought, Court Holds Underwriters Qualify For Administrative Exemption

Applicability of the technical FLSA exemptions can sometimes turn on subtle distinctions, a frustrating proposition for FLSA litigants. A new opinion highlights these subtleties, as, on a motion for reconsideration made ahead of a bench trial, a court reversed its earlier ruling denying summary judgment to defendant bank as to the applicability of the administrative exemption to the bank’s underwriters, and granted summary judgment in defendant’s favor. McKeen-Chaplin v. Provident Sav. Bank, FSB, 2015 U.S. Dist. LEXIS 106245 (E.D. Cal. Aug. 12, 2015).

Evaluating USDOL's Proposals: Avoid Dangerous Assumptions

Employers are of course continuing to evaluate the impact of the U.S. Labor Department's proposed increase in the minimum dollar amount for the federal Fair Labor Standards Act's Section 13(a)(1) exemptions' salary requirement.

Salaried No More? Government to Announce $50,400 Exemption Threshold

We have previously written about President Obama’s plan to modernize regulations governing the executive, administrative, and professional exemptions (“White Collar” exemptions) from minimum wage and overtime. Last year, President Obama signed a Presidential Memorandum instructing the Department of Labor “to propose revisions to modernize and streamline the existing overtime regulations.” The DOL’s proposal was originally expected in November 2014, but was delayed until 2015. A key part of this overhaul was expected to be an increase of the minimum amount of money an employee must earn to be eligible for salaried exempt (from overtime) status. In a blog post written by President Obama on the Huffington Post in late June, he finally revealed the extent of this increased threshold: from roughly $23,600 to more than double – $50,400!

Exemption Comments Already Being Filed

Nearly 1,600 comments have already been posted in response to the U.S. Labor Department's proposals regarding the federal Fair Labor Standards Act's Section 13(a)(1) exemptions. Not surprisingly, there is great concern about the magnitude of the salary increase USDOL has proposed, both the $921 level that is actually on the table and the $970 figure that USDOL has projected might be in the final regulations.

FLSA Guru Tammy McCutchen Discusses How to Get Ready for New Overtime Regulations

In a recent webinar hosted by XpertHR, one of the leading authorities on the Fair Labor Standards Act offered some advice to help HR prepare for what’s in store.

New York Federal Court: Employee at Parts Company Is Exempt Outside Salesperson

An employee for an automotive and truck parts company is an exempt outside salesperson under the FLSA and the New York Labor Law, despite allegations that he was only a service technician, the Court for the Eastern District of New York rules. Domenech v. Parts Auth., Inc., 2015 U.S. Dist. LEXIS 101214 (E.D.N.Y. Aug. 3, 2015).

It’s Time to Work Overtime on Your Comments to the DOL

Time is not on your side if you are an employer who has yet to address the U. S. Department of Labor’s proposed revisions to the Fair Labor Standards Act’s white collar overtime regulations.

Littler's Tammy McCutchen Testifies that the DOL's Approach in Proposed Overtime Rule is "Unprecedented"

The U.S. Department of Labor's methodology and minimum salary threshold set forth in its proposed revisions to the Fair Labor Standards Act's "white collar" exemptions are "unprecedented in the FLSA’s 77-year history," explained Littler Principal Tammy McCutchen during a Subcommittee on Workforce Protections hearing. The DOL's Wage and Hour Division released its proposed rule last month. Under the terms of the proposal, the agency would set the minimum salary threshold used to separate exempt from non-exempt employees at the 40th percentile of the salary earned by all non-hourly paid employees, and create a mechanism for annual automatic increases. By the year 2016, when a final rule is expected to take effect, this calculation would result in a minimum salary threshold of $970 per week, or $50,440 per year.

Second Circuit Holds That Contract Attorney Properly Alleged Misclassification Claim

Reversing Judge Richard J. Sullivan’s 2014 decision, a panel of the Court of Appeals for the Second Circuit ruled today that a contract attorney who provided document review services on a multi-district litigation for a law firm through a third party staffing firm colorably alleged an FLSA violation based on his assertion that the document review services he provided did not constitute legal work. Lola, et al. v. Skadden, Arps, et ano., 2d Cir., No. 14-3845, 07/23/2015.

Overtime Rule Could Harm Employers, Witnesses Warn Lawmakers

The US Department of Labor's proposal to roughly double the minimum salary for most employees exempt from the overtime requirements of the Fair Labor Standards Act (FLSA) will have many unintended consequences, experts told Congress today.

U.S. Department of Labor Proposes Regulatory Changes that Would Greatly Expand the Number of Non-Exempt Employees

The U.S. Department of Labor (DOL) recently issued its long anticipated proposal to update the regulations on overtime exemptions for certain “white collar” employees.Under the Fair Labor Standards Act, workers are entitled to overtime pay of 1 ½ times their regular rate of pay for hours worked over 40 in a workweek, but there are exemptions for executive, administrative, and professional employees (among other exemptions). In order to qualify for one of these three exemptions, an employee must meet both a “duties” test and a “salary” test. The new proposed regulations would modify the salary test by increasing the minimum required salary from $455/wk. ($23,660 annually) to $921 per week ($47,892 annually). The salary levels were last updated in 2004. Check out our newest HRW Alert for more information about how these regulatory changes can affect your company as well as how to submit comments to the Department of Labor. Please click this link for your copy of the full HRW Alert.

Evaluating The Impact Of USDOL's Salary Proposal

The U.S. Labor Department has of course proposed a substantial increase in the minimum salary amount required to meet the basic compensation criterion for an executive, administrative, professional, or a derivative exemption under the federal Fair Labor Standards Act's Section 13(a)(1).

A Call to Action: The Comment Period on the new Proposed Overtime Regulations Begins

On Monday July 6, 2015 the Obama Administration and U.S. Department of Labor (DOL or Department) published their proposal to revise the Part 541 overtime exemption regulations in the Federal Register, beginning the required 60-day comment period. It is crucial that all employers submit thorough and thoughtful comments on not just the proposed over-100 percent increase in the minimum salary for all white collar exemptions but also on the DOL’s specific request for comments on the possible need for change in the duties test. Any new duties test rule could have a profound impact on both employees meeting the new minimum salary test and entire classes of currently exempt managerial and administrative employees who will not meet the proposed new highly compensated employee test of at least $122,148.

DOL Proposes Changes to White Collar Overtime Pay Exemptions

On July 6, 2015, the U.S. Department of Labor (DOL) formally proposed revisions to the executive, administrative, and professional (EAP) exemptions to the overtime pay requirement of the Fair Labor Standards Act. In addition, the Department requested comments on those proposed revisions and on other possible changes to the EAP exemptions and other white collar exemptions.

DOL’s Part 541 Proposal: Next Steps

Now that the Obama Administration and U.S. Department of Labor (DOL or Department) have released its proposal to revise the Part 541 overtime regulations, it is important to understand what may be next and when we can expect developments with this regulatory proposal.

DOL Publishes the Proposed Revisions to the White Collar Regulations and Sets a Deadline to Submit Comments

On July 6, 2015, the proposed rule issued by the Department of Labor to revise the “white collar” overtime exemptions was published in the Federal Register, available here. The DOL has established a 60-day period for the public to submit written comments to the proposed rule. The comments are currently due on or before September 4, 2015 (the Friday before Labor Day) and should be submitted either electronically through the Federal eRulemaking Portal at http://www.regulations.gov or by mail addressed to Mary Ziegler, Director of the Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue N.W., Washington, DC 20210.

Classifying Employees as Exempt from Overtime May Become a Lot More Costly

This week, the Department of Labor announced proposed changes to the white-collar overtime exemptions under the Fair Labor Standards Act ("FLSA"). If enacted, these changes will significantly impact employers. To qualify as exempt from overtime under federal law, employees currently must be paid a salary of at least $455 per week ($23,660 per year) and their "primary duty" must be executive, professional, or administrative -- as those terms are defined under federal law.

The Proposed Overtime Regulations: What They Say, What They Mean, and What To Do Now

he U.S. Department of Labor (DOL) issued its long-awaited proposed rule that would change the federal regulations of the Fair Labor Standards Act’s (FLSA) overtime provisions in a June 30, 2015 Notice of Proposed Rulemaking (NPRM), and the firestorm of praise and criticism has begun.

The Good, the Bad, and the Ugly – The Department of Labor Releases Its Proposed Update to the White-Collar Regulations

You may recall our previous alert regarding President Obama’s March 2014 memorandum that instructed the Labor Secretary to “modernize and streamline” the regulations on exemptions from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements and warning you about imminent changes. Today, the Department of Labor (DOL) finally released the details of the long-awaited proposed rule on these exemptions under the FLSA. This proposed rule may impact your ability to classify your workers as exempt from minimum wage and overtime.

eLABORate: DOL Proposes Doubling the Salary Level to Qualify Employees as Overtime Exempt

The Department of Labor has just announced a proposed rule that would increase by more than two times the weekly salary required to treat most employees as exempt from the Fair Labor Standards Act’s overtime requirements.

Comment Period on New Overtime Proposal to End Early September, Say DOL Officials

In a conference call held on Wednesday morning, Labor Secretary Thomas Perez and Wage and Hour Administrator David Weil fielded questions about the recently released proposal to revise the Fair Labor Standards Act overtime regulations for white collar employees. During the call, the DOL officials discussed the new proposed salary threshold, potential changes to the duties test, and the notice-and-comment period deadline.

Proposed Regulations Published ? Salary Floor Would Be Doubled (Updated 07 02 15)

UPDATED 07 02 15: According to the Federal Register website, the proposals will be officially published this coming Monday, July 6. If they are, then comments will be due no later than Friday, September 4, 2015.

The DOL's Proposed Amendments Increase the Salary Threshold for the FLSA's White Collar Exemptions - Dramatically Expanding the Number of Employees Eligible for Overtime

Executive Summary: Today, in a 295-page report, the U.S. Department of Labor ("DOL") issued its long-awaited proposed amendments to the Fair Labor Standards Act's ("FLSA") "white collar" exemption tests for executive, administrative, and professional employees (located in 29 CFR Part 541). The DOL refrained from amending the duties portion of the tests; however, it did revise the salary basis and salary level tests. If adopted, the DOL estimates that the new regulation will eliminate the exempt status for approximately 21.4 million employees—increasing the financial and regulatory burdens on employers throughout the United States. Despite not amending the duties portion of the white collar exemptions, the DOL discussed in detail the long and short tests, which were eliminated in 2004, and suggested that it may revisit the issue.

DOL Releases Proposed Revisions to "White Collar" Overtime Exemptions

On June 30, 2015, President Obama and Secretary of Labor Perez released a 295-page Notice of Proposed Rulemaking (NPRM), seeking public comments on proposed changes to the "white collar" overtime exemption regulations. The NPRM, along with a Fact Sheet and FAQs, are available on the Department of Labor's website.

DOL Proposes Momentous New Wage-Hour Regs

The anxiously awaited proposed changes in regulations defining the federal Fair Labor Standards Act’s Section 13(a)(1) executive, administrative, professional, outside-sales, and derivative exemptions have been published by the U.S. Labor Department for public consideration and comment.

The Proposed Overtime Regulations: Are Your White Collar Employees Still Exempt?

On June 30, 2015, the U.S. Department of Labor (DOL) announced its long-awaited proposed rule that would revise the regulations concerning the white collar exemption contained in section 13(a)(1) of the Fair Labor Standards Act (FLSA). According to the announcement, the proposed rule would “extend overtime protections to nearly 5 million white collar workers within the first year of its implementation.”

Proposed USDOL Rule Would Create Millions of Newly Overtime-Eligible Employees

The United States Department of Labor (USDOL) has finally released its much-publicized and frequently delayed Notice of Proposed Rulemaking, which would update the Fair Labor Standards Act (FLSA) regulations concerning who is and is not eligible for overtime pay under federal law. The USDOL estimates that some 5 million “white collar” workers will become newly eligible for overtime pay should the proposed rule go into effect.

DOL Plans to Double Minimum Salary for Overtime-Exempt Employees to $50,440

The minimum salary for an employee exempt from the overtime requirements of the Fair Labor Standards Act (FLSA) would rise to $50,440 under draft rules proposed today by the US Department of Labor (DOL).

Exemption Proposals Apparently Still Under Review

It has been widely anticipated that the U.S. Labor Department's proposed new definitions for the federal Fair Labor Standards Act's Section 13(a)(1) executive, administrative, professional, outside-sales, and derivative exemptions would be officially published this week (if not today).

Attorney Lawsuit over Overtime Pay

Professionals often require additional assistance handling time-consuming, but routine, tasks. This is particularly apparent in complex litigation that involves voluminous discovery and document review. Not surprisingly, document review can quickly become one of the more labor-intensive and expensive stages of the case. In order to meet this challenge, many firms will hire temporary attorneys to review the discovery for privilege and scope. Before doing so, query whether these firms consider the overtime implications of the FLSA.

Projected Impact of the Upcoming Overtime Rules On Retail and Hospitality

As we await the issuance of new federal overtime regulations, employers in the retail and hospitality industries may be interested in the recent National Retail Federation (NRF) report, “Rethinking Overtime.” The NRF report includes the results of a study conducted by Oxford Economics (a leading global economic consultancy firm founded with Oxford University), which looked at the projected impact of the anticipated overtime rules on the retail and hospitality industries. Among the key findings in the study is that the overtime proposal under consideration could cost the retail and hospitality sectors billions of dollars in added costs and would disproportionally impact businesses operating in rural states, where there is a larger percentage of currently exempt employees who will be subject to the overtime rules as a result of the coming changes.

Third Circuit Upholds the Motor Carrier Exemption for Drivers Who Did Not, But Reasonably Could Have Been Expected to, Cross State Lines

Are drivers of a motor carrier who rarely or never drive the carrier's interstate routes covered by the motor carrier exemption of the Fair Labor Standards Act? Yes, according to the U.S. Court of Appeals for the Third Circuit in Resch v. Krapf's Coaches, Inc., Case No. 14-3679 (3d Cir. May 12, 2015).

FLSA Exemption Revisions Sent To OMB (Updated 05 08 15: Proposals To Be Out By June 18)

U.S. Secretary of Labor Tom Perez has announced that proposed new definitions for the federal Fair Labor Standards Act's Section 13(a)(1) executive, administrative, professional, outside-sales, and derivative exemptions have been submitted to the federal Office of Management and Budget to seek its approval for their release for public comment.

FLSA Exemption Revisions Sent To OMB

U.S. Secretary of Labor Tom Perez has announced that proposed new definitions for the federal Fair Labor Standards Act's Section 13(a)(1) executive, administrative, professional, outside-sales, and derivative exemptions have been submitted to the federal Office of Management and Budget to seek its approval for their release for public comment.

DOL "Springs" Its Part 541 Proposal for Review

On Tuesday, May 5, 2015, the U.S. Department of Labor (DOL) announced that it had sent its draft proposed part 541 overtime regulations to the Office of the Information and Regulatory Affairs (OIRA) at the Office of Management and Budget for review. President Obama signed a presidential memorandum on March 13, 2014, directing the Secretary of Labor to revise the Part 541 overtime regulations that define the executive, administrative, professional, outside sales, and computer employee exemptions from overtime and minimum wage requirements contained in section 13(a)(1) of the Fair Labor Standards Act. The DOL last revised these Part 541 regulations in 2004.

FLSA Exemption Changes: More On Salaried-Employee Alternatives

Our April 27 post gave an example of how to reduce the financial impact of a previously-exempt employee's becoming subject to the federal Fair Labor Standards Act's overtime requirement.

FLSA Exemption Changes: Some Compensation Alternatives For Salaried Employees

No one knows when the U.S. Labor Department will eventually implement revised definitions of the federal Fair Labor Standards Act's Section 13(a)(1) exemptions (we have covered these developments earlier). But whenever this happens, the new regulations are likely to:

Overtime Changes Threaten the Exempt Status of Retail and Hospitality Managers

The National Retail Federation’s (NRF) Committee on Employment Law held its spring meeting last week, and one of the hottest topics on the minds of the attendees concerned the impact that the U.S. Department of Labor’s proposed changes to the overtime regulations would have on retail and hospitality industry employers. As we explained in a recent post, “Supreme Court Eliminates Notice-and-Comments for Some Agency Interpretations,"

Oil Field Employers Post-McMaster: Still Searching for Clarity on the TCA’s Impact on the Motor Carrier Act Exemption

In McMaster v. Eastern Armored Services, Inc., No. 14-1010 (March 11, 2015), the Third Circuit Court of Appeals issued one of the first federal appellate court opinions discussing the SAFETEA-LU Technical Corrections Act of 2008 (TCA). The TCA is an uncodified amendment to the Fair Labor Standards Act of 1938 (FLSA) that, according to the Third Circuit, creates a “carveout” from the Motor Carrier Act Exemption (MCAE). Under the MCAE, professional motor carriers are generally exempt from the overtime requirements of the FLSA. The Third Circuit explained that the TCA “waives the exemption for motor carrier employees who, in whole or in part, drive vehicles weighing less than 10,000 pounds.”

Must Management Justify Treating Exempt Employees As Non-Exempt?

For years, The Big Corporation has treated its Department Supervisors as meeting all of the requirements for the executive exemption from the federal Fair Labor Standards Act's minimum-wage and overtime requirements. However, TBC's CEO has now concluded that, for a variety of reasons, it makes more business sense to treat them as non-exempt employees, including paying them by-the-hour.

Ninth Circuit Holds Service Advisors Non-Exempt Under FLSA Dealership "Salesman" Exemption; Section 7(i) Exemption Is Still Available

The Ninth Circuit U.S. Court of Appeals (with jurisdiction over the states of Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) has ruled in Navarro v. Encino Motorcars, LLC that Service Advisors employed by automobile dealerships do not qualify for the Section 13(b)(10)(A) overtime exemption under the federal Fair Labor Standards Act. It is the first court to have held this way

Proposed FLSA Exemption Changes Still In Limbo

Employers await with bated breath the release of the U.S. Labor Department's proposed new definitions for the federal Fair Labor Standards Act's Section 13(a)(1) executive, administrative, professional, outside-sales, and derivative exemptions. Apparently, they will just have to keep waiting – for how long, the U.S. Labor Department will not say.

Supreme Court Upholds DOL's Rulemaking Procedure in Reclassifying Mortgage Loan Officers

Executive Summary: On March 9, 2015 the U.S. Supreme Court held that a federal agency is not required to engage in notice-and-comment rulemaking when it issues an interpretation of a regulation that is significantly different from its prior interpretation. In Nickols v. Mortgage Bankers Association, the Court overruled a line of cases established by the Ninth Circuit, which required administrative agencies to engage in notice-and-comment rulemaking when changing a prior administrative interpretation of an agency regulation. Although the Court's ruling specifically addresses the actions of the U.S. Department of Labor (DOL), it could have significant ramifications in other areas as federal agencies continue their efforts to implement the Obama Administration's aggressive employment related agenda.

FLSA Changes Could Make Many Retail Managers Non-Exempt Employees

Expectations are that the U.S. Labor Department’s proposed regulations re-defining the federal Fair Labor Standards Act‘s executive, administrative, professional, outside-sales, and derivative exemptions will be released in the next few weeks, if not within days.

FLSA Exemption Changes: A Possible "Plan B" For Retailers

Expectations are that the U.S. Labor Department's proposed regulations re-defining the federal Fair Labor Standards Act's executive, administrative, professional, outside-sales, and derivative exemptions will be released in the next few weeks, if not within days. As we have said, these provisions will probably include (i) a substantial increase in the minimum salary amount, and (ii) a significant narrowing of the duties-related requirements.

White Collar Exemptions and Why Job Descriptions are Essential

As a general rule, the Fair Labor Standards Act (“FLSA”) mandates that employees be paid at least the federal minimum wage for all hours worked. It also requires that employees receive overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. To be an exception to the general rule, or “exempt,” the employer must demonstrate that the employee falls into one of the exemptions as defined under the FLSA.

A Substantial Salary-Test Jump Is Likely

On January 28, the Economic Policy Institute announced that "noted economists and a former Secretary of Labor" had written to U.S. Secretary of Labor Thomas Perez to propose an increased salary threshold of around $960 a week (about $50,000 a year) for the federal Fair Labor Standards Act's executive, administrative, professional, and derivative exemptions. EPI's website also provides what is essentially a way to sign a petition to this effect. (It is worth noting that Heidi Shierholz, who last September advocated raising the salary level to $984 a week and who is still shown on EPI's website as a "Former EPI Economist", is currently Secretary Perez's Chief Economist.)

White Collar Exemption Changes May Increase Labor Costs

Very soon, game-changing rules regarding who qualifies for the so-called white collar exemptions from the overtime pay requirements of the Fair Labor Standards Act will be issued for public review and comment by the U.S. Department of Labor’s Wage & Hour Division. Once finalized, these changes will affect virtually every employer in the U.S.

Tech Support - The FLSA's Specialized Exemption

The Fair Labor Standards Act (FLSA) provides several exemptions from overtime requirements for employees whose job duties meet specific tests. Most employers are familiar with the standard “white- collar” exemptions – including the “executive” and “administrative” exemptions – and the job duties and “salary basis” tests required to satisfy those exemptions.

FLSA Exemptions And "Overtime Rights"

We continue to follow developments relating to President Obama's directive that the U.S. Labor Department "modernize and streamline" its regulations governing the federal Fair Labor Standards Act's Section 13(a)(1) executive, administrative, professional, and "outside salesman" exemptions. For employers, the signs remain ominous.

Senate Bill May Hint at Where White Collar Exemptions are Going

On March 13 of this year, President Obama issued a Presidential Memorandum (“Memorandum”) directing the federal Department of Labor (“DOL”) to modernize regulations governing the “white collar” exemptions from minimum wage and overtime.

Department of Labor Plans To Take Next Step in White Collar Exemption Overhaul in November

Earlier this year, President Obama ordered the Secretary of Labor to overhaul the executive, administrative, and professional exemptions under the Fair Labor Standards Act’s overtime and minimum wage requirements.

eLABORate: Fifth Circuit Broadens Ability of Employers to Satisfy Motor Carrier Act Exemption

In a recent decision, the Fifth Circuit Court of Appeals, in Allen v. Coil Tubing, held that a court should look at whether the duties of a class of employees’—rather than the duties of individual or some sub-set of employees’—substantially affect the safety of interstate transportation, and affirmed a district court’s ruling that employees of an oil well service company were exempt from the overtime provisions of the Fair Labor Standards Act (“FLSA”) under the Motor Carrier Act (“MCA”).

November Target For Proposed Exemption Changes

As we reported previously, in March President Obama directed the U.S. Labor Department to "modernize and streamline" its regulations governing the federal Fair Labor Standards Act's Section 13(a)(1) executive, administrative, professional, and "outside salesman" exemptions. Among other things, he has instructed USDOL to "consider how the regulations could be revised to update existing protections consistent with the intent of the Act . . .."

What Do Dinosaurs and Your Salaried Employees Have In Common?

Increasing the minimum wage for federal contractors is not the only change President Obama is looking to make to federal wage and hour laws. Recently, the President signed a Presidential Memorandum directing the federal Department of Labor to modernize regulations governing the executive, administrative, and professional exemptions from minimum wage and overtime.

Legal Alert: President Obama Orders Changes In Overtime Regulations – What to Expect and When

Executive Summary: President Barack Obama has directed the Department of Labor to "update" and "modernize" overtime rules to expand the number of workers eligible for overtime pay.

President Seeks To Curtail FLSA "White Collar" Exemptions

President Obama has instructed the U.S. Labor Department to revise the federal Fair Labor Standards Act's so-called "white collar" exemptions in a "Presidential Memorandum" released on March 13. This effort is intended (as the New York Times put it apparently in light of a White House briefing) to "force American businesses to pay more overtime to millions of workers . . .."

Don’t Be Bulldozed by Snow Days: What to Consider Before Docking Pay for Weather-Related Absences

With thanks likely to the polar vortex, states across the nation are experiencing record low temperatures this winter. The bitterly cold winter has caused employees to call off work (or show up late) and employers to voluntarily close down for a day or more. In these situations, employers are often left wondering whether they must pay employees who have taken time off for reasons related to bad weather. Under the federal Fair Labor Standards Act (FLSA), the answer depends on a couple of factors.

How To Calculate Unpaid Overtime, The Sequel: Fifth Circuit Rejects FWW Method In Misclassification Cases

In Black v. SettlePou P.C., the Fifth Circuit Court of Appeals overturned a district court’s ruling concerning the proper methodology for calculating damages when an employee is misclassified as exempt. In so doing, the Fifth Circuit departed from what was considered to be settled precedent after its own opinion in Ransom v. Patel Enterprises, Incorporated, decided just 56 days before SettlePou.

FLSA Regulations: The Impact of Improper Salary Deductions

In this second part of our series, we explain how to avoid improper salary deductions that could destroy the overtime exemption of an employee who otherwise meets the applicable “duties test” for one of the so-called “white collar” exemptions.

"Extra" Pay And Overtime Headaches

A recent $4 million settlement between the U.S. Labor Department and a Texas healthcare employer highlights a recurring overtime issue under the federal Fair Labor Standards Act.

Major Changes To Home Companionship Exemption Announced

On September 17, the U.S. Labor Department (DOL) announced that is will be issuing a final rule that will bring significant changes to the “companionship” exemption in the federal Fair Labor Standards Act’s Section 13(a)(15). The final rule is scheduled to be published in the Federal Register in October and will become effective January 2015. Although the Final Rule is not yet available, the DOL issued a press release and “fact sheets” purporting to summarize the changes.

Seventh Circuit Exempts Interstate School Bus Drivers From FLSA Overtime Requirements

Last month, in Almy v. Kickert School Bus Line, Inc., No. 13-1273 (July 16, 2013), the Seventh Circuit Court of Appeals joined the Second, Third, Ninth, and Eleventh Circuits,in finding that school bus drivers who transport students across state lines fall within the “motor-carrier exemption” to the Fair Labor Standards Act (FLSA), and are thus ineligible for overtime pay.

Legal Alert: Undocumented Workers Who Are "Off the Clock" or "Off the Books" Are Still Subject to the FLSA

Executive Summary: In Lucas v. Jerusalem Café, the United States Court of Appeals for the Eighth Circuit held that undocumented workers are entitled to recover for unpaid overtime and minimum wage violations under the federal Fair Labor Standards Act (the "FLSA").

Eighth Circuit Holds Gross Vehicle Weight Rating Determines FLSA Motor Carrier Exemption

The Eighth Circuit Court of Appeals recently held that an employee who drives a motor vehicle that has a gross vehicle weight rating (GVWR) of more than 10,000 pounds falls within the “motor carrier exemption” of the Fair Labor Standards Act (FLSA). According to the Eighth Circuit, which issued the decision in McCall v. Disabled American Veterans, et al. on July 31, 2013, an employee falls within the exemption regardless of the actual weight of the vehicle when he or she is driving it.

Eleventh Circuit Holds "Program Manager" Satisfies FLSA’s Administrative Exemption

As most employers are aware, the Fair Labor Standards Act (“FLSA”) requires that employers pay non-exempt employees overtime compensation for any hours worked over 40 in a workweek. 29 U.S.C. § 207(a)(1). In an Eleventh Circuit case decided this month, Adams v. BSI Management Systems America, Inc., 2013 WL 3722115 (11th Cir. July 17, 2013), a Supply Chain Security Program Manager who was terminated for poor performance sued her former employer alleging that she should have been paid overtime as a non-exempt employee.

D.C. Circuit to DOL: You Can't Just Change Your Mind About Mortgage Loan Originators

Last week, a unanimous panel of the D.C. Circuit Court of Appeals vacated a 2010 Department of Labor Administrator Interpretation (AI) in which the DOL had stated that mortgage loan originators are non-exempt, but instead must be paid minimum wage and overtime under the Fair Labor Standards Act. Mortgage Bankers Association v. Harris, No. 12-5246 (D.C. Cir. July 2, 2013). In 2010, the Department of Labor announced that in lieu of its historic practice of issuing opinion letters in response to specific factual scenarios presented by petitioners, it would issue more generalized guidance in the form of Administrator Interpretations (AIs) when it found it necessary to provide further clarity regarding the proper interpretation of a statutory or regulatory issue. The first AI rescinded a 2006 opinion letter which had stated that mortgage loan officers as described in that letter qualified for the FLSA's administrative exemption, and employers were not required to pay them overtime. The 2010 AI reversed DOL's position, stating that mortgage loan officers performing "typical" duties did not meet the administrative exemption, and so were owed overtime compensation. Plaintiffs' lawyers rejoiced.

IRS Expands Eligibility for Misclassification Amnesty Program

The Internal Revenue Service (IRS) announced expanded eligibility for its Voluntary Classification Settlement Program (VCSP). Some of the changes are permanent, while others are temporary.

Courts Aren't Buying USDOL's "Service Writer", "Service Advisor" Comments

In April 2011, the U.S. Labor Department disavowed its 24-year-long acknowledgment that the federal Fair Labor Standards Act's Section 13(b)(10)(A) overtime exemption applies to automobile-dealership employees doing the typical work of service writers, service advisors, etc. Instead, USDOL seemed to embrace the view that the absence of a literal reference to these kinds of employees in Section 13(b)(10)(A)'s "salesman, partsman, or mechanic" formulation meant that they are subject to the FLSA's overtime requirement.

Sixth Circuit Reopens Debate on Exempt Status of Mortgage Loan Officers Under FLSA

In 2010, the Department of Labor sought to settle the question of whether a mortgage loan officer constitutes an administrative employee exempt from the Fair Labor Standards Act's minimum wage and overtime requirements. In its novel Administrator's Interpretation, the Department opined that a "typical" mortgage loan officer would not satisfy the exemption, because he or she would be primarily engaged in sales. In the wake of the Administrator's Interpretation, many companies reclassified their mortgage loan officers as non-exempt, and litigation has been rampant. An October 2012 decision from the Sixth Circuit, however, affirming a jury verdict in favor of Quicken Loans that its mortgage bankers were properly classified as exempt administrative employees, throws the debate open again, and calls into question the continuing impact of the DOL's Interpretation.

U.S. Supreme Court Issues Major Decision on Overtime Pay

The U.S. Supreme Court ruled yesterday that pharmaceutical sales representatives are not entitled to overtime pay. According to the 6-3 decision in Christopher v. Smithkline Beecham Corp., the representatives fall within the Fair Labor Standard’s Act exemption for “outside sales” employees, even though the representatives obtain, at most, a non-binding commitment from a physician to prescribe drugs that are later purchased at a pharmacy.

High Court Declines to Follow DOL's Interpretation of FLSA Regulation

Yesterday, in Christopher v. SmithKline Beecham Corp., the U.S. Supreme Court affirmed that pharmaceutical sales representatives employed by drug companies are exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act under the statute's exemption for "outside salesmen." The ruling resolved a conflict among federal circuit courts on the issue and marks a major victory for the pharmaceutical industry. While drug companies have been classifying pharmaceutical sales representatives as exempt for decades, the classification had been recently challenged in numerous courts and, since 2009, the U.S. Department of Labor has sided with employees in arguing that pharmaceutical sales representatives do not satisfy the criteria for exempt outside salesman under FLSA regulations. The Supreme Court's decision to decline deference to the DOL's interpretation of regulations has a far reaching impact that extends beyond the pharmaceutical industry and will affect the way courts view the DOL's position on interpretations of other FLSA regulations.

Pharma Happy With Supreme Court Rx: "No Overtime Pay For Pharma Sales Reps"

In an important wage-hour decision with potential relevance beyond the pharmaceutical industry, the Supreme Court held on June 18, 2012, that pharmaceutical sales reps at GlaxoSmithKline (GSK) were exempt from overtime pay under the Fair Labor Standards Act's exemption for "outside salesmen," resolving a split among the courts.

Function Over Form: The Supreme Court's Realistic View of the FLSA

For those who think that one of the travesties of the recent history of employment law has been the explosion of FLSA collective action litigation, today's 5-4 decision by the Supreme Court holding that pharmaceutical representatives are in fact exempt employees under the outside sales exemption is a re-affirmation that common sense can in fact prevail. Christopher v. SmithklineBeacham Corp. (6/18/12).

High Court Rules Pharmaceutical Sales Reps Are Exempt From FLSA's Overtime Requirements

On June 18, 2012, with Justice Samuel Alito writing for a 5-4 majority, the U.S. Supreme Court considered whether the term "outside salesman," as defined by Department of Labor (DOL) regulations, encompasses pharmaceutical sales representatives. The Court ruled that these sales representatives qualify as outside salesmen and thus, are exempt from the overtime compensation requirements of the Fair Labor Standards Act (FLSA). Given "the industry's decades-long practice of classifying pharmaceutical detailers as exempt employees" and the DOL's failure to initiate any enforcement actions with respect to sales representatives, the Court found that a decision to the contrary "would result in precisely the kind of ‘unfair surprise’ against which our cases have long warned." Although a critical decision for the pharmaceutical industry in its own right, the case generally has been viewed more importantly for its insight as to the weight the Supreme Court would give to agency views of the laws they enforce. Christopher v. SmithKline Beecham Corp., DBA GlaxoSmithKline, No. 11–204, U.S. Supreme Court (June 18, 2012).

Big Supreme Court Win For Pharmaceutical Industry

The U.S. Supreme Court ruled today that pharmaceutical sales representatives employed by GlaxoSmithKline were exempt from overtime pay under the federal Fair Labor Standards Act's "outside salesman" exemption. The Court's decision in Christopher v. Smithkline Beecham Corp. resolves conflicting views expressed by a number of federal courts.

Legal Alert: Supreme Court Finds Pharmaceutical Sales Reps Exempt

The U.S. Supreme Court held today that pharmaceutical sales representatives qualify as "outside salesmen" and, accordingly, are exempt from the overtime requirements of the federal Fair Labor Standards Act (FLSA). See Christopher v. SmithKline Beecham Corp. (No. 11-204, U.S. June 18, 2012). Importantly, the Court also refused to give controlling deference to the Department of Labor's (DOL) change of position in interpreting the regulation to exclude these employees, which was first announced in amicus briefs filed in court litigation. The Court noted that where, as here, an agency's announcement of its interpretation is preceded by a lengthy period of conspicuous inaction, "the potential for unfair surprise is acute."

Is the Administrative Exemption a Cure for the Pharmaceutical Industry’s Wage-and-Hour Headaches?

The pharmaceutical industry has been put under the microscope recently in several wage-and-hour cases dealing with the classification of sales representatives. The Seventh Circuit ruled recently that the administrative exemption applies.

Retail Industry: A Tale Of Two Stores.

Most small box retailers treat the manager of each individual location as an exempt employee under the "managerial exemption" of the Fair Labor Standards Act. As such, the store managers are not paid for hours worked over 40 in a workweek. Many small retailers, those with stores typically between 7,000 and 10,000 square feet, have been assaulted with litigation from current and former store managers claiming they are not exempt employees. This article takes a closer look at two cases that came to diametrically different results based on very similar facts.

More Participants Join USDOL "Misclassification" Pact

The U.S. Labor Department continues to expand the number of jurisdictions and agencies with which it is collaborating to end what it has called "the business practice of misclassifying employees [as independent contractors] in order to avoid providing employment protections." The most recent additions are the Colorado Department of Labor and Employment and the Louisiana Workforce Commission.

Proponents "Can't Wait" For Demise of Companionship, Live-In Domestic Exemptions

The U.S. Labor Department has extended the time for commenting upon the proposed provisions that would essentially spell the end of the federal Fair Labor Standards Act exemptions for companions and live-in domestic-service workers. The new deadline is March 12, 2012.

Possible Misclassification of Employees Costs Novartis $99 Million

Swiss pharmaceutical manufacturer Novartis thought it was playing by the rules when it treated its sales representatives as exempt from overtime under the Fair Labor Standards Act. Novartis’ experience shows what can happen when companies follow industry standards without independently assessing if the law supports the longstanding industry practice.

Bill Would Broaden FLSA Computer Exemption

A bill introduced in the U.S. Senate (S. 1747) would significantly expand the scope of the current exemption for certain computer employees that is found at Section 13(a)(17) of the federal Fair Labor Standards Act. The proposed "Computer Professional Update" Act (or "CPU" Act) was submitted by North Carolina Senator Kay Hagan and three co-sponsors. It is now pending in the Senate's Committee on Health, Education, Labor, and Pensions.

Are Pharmaceutical Sales Reps Exempt As "Outside Salesmen?" Diagnosis Unclear

Just last August, the U.S. Court of Appeals for the 2nd Circuit issued a ruling that sent shock waves through segments of the healthcare industry. Then, as affected employers began responding to that decision, the 9th Circuit reached an apparently contradictory decision that may have raised more questions than it answered.

The FLSA's "Remedial Training" Overtime Exception

Many employers find nowadays that at least some workers are unable to read, write, or do simple arithmetic beyond the lowest levels (if at all). Management wants to give the employees mandatory training in these areas, but not if that means incurring overtime costs when the instructional time causes the employees' hours worked to exceed 40 in a workweek. But, under the right circumstances, there is a little-known way to increase employees' basic academic abilities without having to pay FLSA overtime premium for the time they spend learning.

Efforts To Curtail The FLSA's "Companionship" Exemption Possibly Moving To The Regulatory Arena.

In late June, we noted legislation introduced in the Senate and in the House of Representatives that would essentially repeal the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption in any practical sense. U.S. Labor Department regulations and interpretations elaborate upon how and to whom the exemption may be applied.

Quick Quiz: Paid-Time-Off And The "Salary Basis"

Alice performs work meeting the duties requirements for the federal Fair Labor Standards Act's administrative exemption. She usually works 50 hours in five days each workweek. She is paid a weekly salary of $950. Alice is eligible for five paid days off each year, and she has three days left.

Renewed Attempt To Destroy The FLSA's "Companionship" Exemption

Another effort is afoot to limit the federal Fair Labor Standards Act's Section 13(a)(15) "companionship" exemption to the point of non-existence in any practical sense. Last week, apparently-identical bills (S. 1273 and H.R. 2341 -- see currently available version below) were introduced in the Senate and the House which would have precisely this effect. Similar measures were proposed last year, but the newer ones would impose even-narrower restrictions.

The FLSA Overtime Exemption For Service Writers

Last week, the U.S. Department of Labor published a Final Rule concerning changes to its regulations and interpretations. One portion of the Final Rule's commentary appears to say that the DOL is now taking the position that employees doing the typical work of service writers/service advisors/service salespeople (we'll refer to them all as "service writers") are NOT exempt from overtime under the federal Fair Labor Standards Act.

Recovering Losses From EXEMPT Employees

Our recent Quick Quiz Answer on recovering losses from non-exempt employees has caused some to ask whether the same analysis applies to employees who are treated as exempt under the federal Fair Labor Standards Act's executive, administrative, or professional exemption (including the "computer employee" and "highly compensated employee" versions).

Quick Quiz Answer: Recovering Losses From Non-Exempt Employees

The answer to our March 14 Quick Quiz is "$110". The federal Fair Labor Standards Act does not prohibit the employer from recouping some of the loss in that workweek, but it does restrict the amount.

Quick Quiz: Recovering Losses From Non-Exempt Employees

Store Associate Alex is paid on an hourly basis at the rate of $10 per hour. On Monday, he accepts a $150 check in payment for merchandise. He was so busy that he forgot to get the necessary customer information, and now the check has been returned because the account is closed. Alex's employer is unable to contact the customer.

SmithKline Beecham Wins On "Outside Salesman" Exemption

The Ninth Circuit U.S. Court of Appeals (Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) has added another chapter in the saga of whether pharmaceutical sales representatives (PSRs) qualify for the federal Fair Labor Standards Act's "outside salesman" exemption. The court recently ruled in Christopher v. SmithKline Beecham Corp. d/b/a GlaxoSmithKline that the Glaxo PSRs did fall within the exemption. The decision creates a split in the federal appellate courts by finding that the exemption applied to PSRs performing duties essentially the same as those found to be non-exempt by the Second Circuit in the Novartis case about which we previously reported.

Quick Quiz Answer: FLSA "Salary Basis" Of Pay

The answer to our January 31 Quick Quiz is "No": Furniture World's policy does not destroy the "salary basis" required for Robin's exempt status under the federal Fair Labor Standards Act. This will be true even if management disciplines or discharges Robin for refusing to make-up the time she missed.

Quick Quiz: FLSA "Salary Basis" of Pay

Robin is in charge of the 50-employee Shipping Department at Furniture World. She is treated as an exempt "executive" employee under the federal Fair Labor Standards Act, including that she is paid a salary of $950 per week. Furniture World adopts a policy that all supervisory employees:

A Ray of Sanity in the FLSA Collective Action Morass: Half-pay in Misclassification Cases.

Given the overwhelming number of FLSA collective actions that continue to be filed, it is hard to find very much encouraging news, but one ray of sanity is the 4th Circuit's opinion in Desmond v. PNGI Charles Town Gaming, (4th Cir. 1/18/11) [pdf].

USWHD Memo Addresses FLSA "Motor Carrier" Exemption.

The federal Fair Labor Standards Act's Section 13(b)(1) provides an overtime exemption for "any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to" a specific section in Title 49 of the U.S. Code dealing with federal motor-carrier law. Employers who have relied upon or followed this so-called "motor-carrier" exemption will remember that an inconspicuous 2005 amendment to Title 49 substantially narrowed its scope. A further revision in 2008 introduced yet other questions and uncertainties.

Court Clarifies Overtime Damages For Misclassified Employees

Courts and litigants have struggled over how to figure overtime due to employees who were misclassified as exempt and who were paid a fixed salary for their hours worked. The federal Fair Labor Standards Act (FLSA) requires that non-exempt employees be paid 1.5 times their regular hourly rates for hours worked over 40 in a workweek. But for a misclassified salaried employee, satisfying this requirement necessitates a couple of threshold determinations.

Second Circuit Strips Pharmaceutical Sales Reps Of Their Exempt Status.

A federal appellate court recently held that pharmaceutical sales representatives did not fall under either the "outside sales" or "administrative" exemptions to the Fair Labor Standards Act (FLSA), and that, accordingly, they had been misclassified and are entitled to unpaid overtime. The overtime to which the workers could be entitled is significant, because they typically work 12-hour days, travel for their jobs, and attend after-hours events as part of their marketing efforts. In re Novartis Wage and Hour Litigation, 09-0437-cv, Second Circuit Court of Appeals (July 6, 2010

Decision Against Novartis Has Implications Beyond Pharmaceutical Industry.

In a major decision with possible relevance outside of the pharmaceutical industry, the Second Circuit U.S. Court of Appeals (Connecticut, New York, and Vermont) gave strong deference to a U.S. Labor Department legal brief and overruled a lower court in deciding that Novartis's pharmaceutical sales reps were not exempt from overtime as outside salespersons or as administrative employees under the federal Fair Labor Standards Act or applicable state laws. On the same day, the Second Circuit also summarily ruled against Schering in a similar case.

Using The Duck Test For Professional Employees.

When classifying their employees for overtime purposes under federal and state wage-hour laws, employers often rely on the equivalent of the "Duck Test": the job's title sounds professional and its duties require expertise and a high degree of skill – it sounds and looks like a professional job, and so it must qualify for the professional exemption even if most of its occupants lack advanced degrees. In other words, they assume that when a high degree of skill and years of experience are needed to perform the position's essential tasks, and the position requires either advanced education or long years of experience, the occupants can be treated as exempt professionals under the Fair Labor Standards Act (FLSA).

Sales Rep Falls Within FLSA’s “Administrative” Exemption Because of Independent Strategic Planning Responsibilities.

Under the Fair Labor Standards Act (FLSA), employees who work more than 40 hours a week are entitled to overtime pay unless they fall under one of the Act’s enumerated exemptions. The 3d U.S. Circuit Court of Appeal found that a Johnson & Johnson sales representative fell within the “administrative” exemption, based upon that person’s high level of planning and foresight, along with her “exercise of discretion and independent judgment with respect to matters of significance” and, therefore, was not entitled to overtime pay.

Sales rep falls within FLSA's "administrative" exemption because of independent strategic planning responsibilities.

Under the Fair Labor Standards Act (FLSA), employees who work more than 40 hours a week are entitled to overtime pay unless they fall under one of the Act’s enumerated exemptions. The 3d U.S. Circuit Court of Appeal found that a Johnson & Johnson sales representative fell within the “administrative” exemption, based upon that person’s high level of planning and foresight, along with her “exercise of discretion and independent judgment with respect to matters of significance” and, therefore, was not entitled to overtime pay. Smith v. Johnson & Johnson, 3d Cir., No. 09-1223, February 2, 2010.

Shutdowns May Have an Impact on Employees’ FLSA-Exempt Status.

Many companies affected by the current economic downturn are searching for ways to help weather that storm. Occasional reduction in work hours, implementing mandatory vacations, or instituting short-term furloughs can help an employer to retain experienced employees, while allowing the company to achieve cost savings in this time of economic crisis. The Department of Labor (DOL) recently released three opinion letters written in January of this year in response to employer inquiries about the effect of such short-term shut-downs on employees’ exempt status under the Fair Labor Standards Act (FLSA).

The Vacation Nobody Wants.

The difficult financial environment is causing many employers to consider cost-savings in the area of employee compensation. The ideas sometimes include a temporary or intermittent scheduling of unpaid days off for employees whom the employer classifies as exempt executive, administrative, or professional employees under the federal Fair Labor Standards Act.

Retail Industry: How Did They Manage? Part One.

The jury said Family Dollar store managers did not "manage" the stores. A federal appeals court affirmed the $35.5 million overtime verdict. Take steps now to minimize the risk of this happening to your business.

Misclassifying Employees Proves to Be an Expensive Mistake.

A Massachusetts temporary-services company specializing in technical and manufacturing staff has learned a $1.8M lesson about the perils of erroneously classifying employees as exempt under the federal Fair Labor Standards Act.

Congress Amends Motor Carrier Exemption: Both Helps and Hurts Employers.

Recent legislation appears to have narrowed the scope of the federal Fair Labor Standards Act's "motor carrier" overtime exemption yet again. The "SAFETEA-LU Technical Corrections Act of 2008" (TCA) further restricts the classes of employees who might qualify for that exemption. A moderate positive is that TCA also limits liability with respect to certain overtime violations occurring before August 10, 2006 that resulted from exemption changes caused by the earlier "Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users" (SAFETEA-LU).

Exempt or Non-Exempt? The Answer Isn't Always Easy.

Since 2001, the Labor Department's Wage and Hour Division has recovered over $1.25 billion in back wages. That's not a typo. Last year alone, the Department recovered $220,613,703 in back wages, a record, which represented a nearly 70% increase in back wage recovery since 2001.

Education Labor Letter: A Primer on the "Salary Basis" for Schools.

Anyone who has ever undertaken the task of analyzing the applicability and implications of "white collar" exemptions under the federal Fair Labor Standards Act (FLSA) knows that it usually requires a multi-tiered, multi-page flow chart, not to mention a great deal of patience. But there is some good news for schools: the exemption analysis for teachers is less complicated because there is no requirement to the meet the "salary basis" test under the FLSA.

When Do Managers, Assistant Managers and Supervisors Qualify as Exempt.

We wish there were an easy and certain answer to the above question, but the reality is that court decisions in this area differ in both analysis and results even given similar factual scenarios. For some time now we have been talking about the huge increase in overtime cases and other actions being filed under the Fair Labor Standards Act (FLSA) and similar state wage and hour laws. No area of employment litigation has been more active recently than wage and hour litigation. In 2007 the steep increase in FLSA lawsuits filed continued as did payouts, collectively totaling over a billion dollars.

Misclassifying A Chef Can Cook Up Trouble.

The number of wage-hour claims has skyrocketed in recent years. As a result, a hospitality employers are more likely than ever before to be the target of a wage-hour lawsuit or a government compliance audit. One thing this means is that industry employers should be sure they have correctly classified everyone they treat as being exempt from the federal Fair Labor Standards Act’s minimum-wage, overtime, and timekeeping requirements.

Update: DOL To Begin Enforcing Narrowed Motor-Carrier Exemption.

We previously reported that under-the-radar Congressional action in 2005 substantially limited the federal Fair Labor Standards Act's Section 13(b)(1) "motor carrier" overtime exemption. This exemption applies to drivers, driver's helpers, loaders, and mechanics for whom the U.S. Transportation Secretary can set qualifications and maximum service hours.
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