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FLSA Overtime – Delayed NOT Dismissed

You may recall that, in late June 2015, the U.S. Department of Labor issued a Notice of Proposed Rulemaking seeking public comment on proposed changes to the Fair Labor Standards Act’s  “white-collar” overtime exemption regulations. The DOL’s proposed rule changes would more than double the minimum salary required for the FLSA’s white-collar exemptions from the current $455 to approximately $970 per week, with additional potential increases each year based on inflation. Also, while the DOL did not propose specific changes to the exemptions’ duties tests, it invited public comment on the subject, hinting that changes to the duties tests likely would be forthcoming in the final regulations, Andrew Long, reported.

The period for public comment on the proposed rules closed in September.  Since September, observers have speculated about when the DOL would issue final binding regulations.  Many commentators believed that we would see final rules likely sometime in late 2015/early 2016.  Employers have begun reviewing their pay practices to being planning for the implementation of the final regulations, which likely will require conversion of many employees currently treated as overtime exempt to non-exempt status or significant changes to the pay of these employees to meet the anticipated increased minimum salary requirement.

The question that lingers for many of you is how does this affect my staff?  If you are a school, you must be aware of the Professional Exemptions and ensure employee classification is carefully considered.  It is easy to think that every teacher or professional on your campus falls into the “Professional Exemption” category because you are a school.  Beware, that is not always the case; especially for special circumstances whereby a certified teacher is not “teaching” their area of expertise the majority of the time.

Pay careful attention to the following facts when classifying employees:

  • Primary Duty “Primary duty” means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.
  • “Work requiring advanced knowledge” means work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment.
  • Advanced knowledge cannot be attained at the high school level.
  • Field of Science or Learning Fields of science or learning include: law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy and other occupations that have a recognized professional status . . .
  • The best evidence of meeting this requirement is having the appropriate academic degree.
  • The Professional Exemption Fact Sheet can be found here.

Because of the significance of the expected changes to the exemption tests, this delay does not mean that you should put off thinking about these issues.  Now is still the time to begin developing a strategy to access and address the exempt status of many white-collar workers.  This delay is good news, but not an excuse to avoid the issue.  Advance planning and preparation will only help employers you prepare and address what likely will be the most significant changes to the overtime exemption tests we have ever seen.