DOLs Proposed FLSA Regulations: What Employers Need to Know Tom - - PowerPoint PPT Presentation

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DOLs Proposed FLSA Regulations: What Employers Need to Know Tom - - PowerPoint PPT Presentation

Sep 21, 2022 235 likes •383 views

DOLs Proposed FLSA Regulations: What Employers Need to Know Tom Gies Andrew Bagley Chris Calsyn July 8, 2015 Todays Presenters Andrew Bagley Tom Gies Chris Calsyn 2 Todays Discussion Proposed changes to the salary level test

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DOL’s Proposed FLSA Regulations: What Employers Need to Know

Tom Gies Andrew Bagley Chris Calsyn July 8, 2015

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Today’s Presenters

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Tom Gies Andrew Bagley Chris Calsyn

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Today’s Discussion

  • Proposed changes to the salary level test
  • Changes to the job duties test?
  • Recommendations for employers in response
  • Special issues for government contractors

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FLSA Introduction

  • Statutory law and extensive federal regulations

– Regulations last updated in 2004 – 2014 directive to “modernize and streamline”

  • Exemption generally require the satisfaction of

three separate tests

– Salary level test – Salary basis test – Job duties tests

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NPRM Published June 30, 2015

  • 60-day “notice and comment” period
  • Proposals, subject to change
  • Key points

– Salary level test going up – DOL solicits comments on the duties tests

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Proposed Threshold for Salary Level Test

  • New threshold: approx. $50,000

– 40th percentile of full-time salaried employees – Currently: $47,892. DOL projects $50,440 by Q1 2016

  • Calculating the salary level

– Guarantee of $970/week

  • Does not include benefits/fringes, bonuses,

commissions

  • DOL invites comments
  • Effective date – anticipated in 2016

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Proposed Threshold for Salary Level Test

  • Indexing: the “salary level” threshold will

fluctuate yearly

  • Regulations also modify HCE threshold

– Set at 90th percentile of weekly earnings for all full-time salaried employees – Proposed amount is currently $122,148

  • Part-time employees subject to timekeeping

requirements

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Job Duties Tests

  • DOL solicits comments
  • Moving target: no proposed changes, but

DOL reserves the right to change the duties tests in the final rule

  • DOL’s concerns

– Percentage of time on nonexempt tasks – Constituencies complaining of lack of clarity

  • DOL to provide more examples

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What Employers Should Be Doing Now

  • Job classification audits – prepare for changes

– Salary adjustments – Other changes in compensation – Changing duties

  • Training on “managing to non-exempt status”

– What constitutes “work” – Timekeeping requirements and time reporting

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What Employers Should Be Doing Now

  • Employee morale issues
  • Oddball situations
  • Financial consequences

– OT costs – Lowering salaries – Budgeting

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  • Fair Pay Rules

– Wage-hour claims are reportable events

  • Higher stakes in classification disputes

Special Implications for Government Contractors

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Relevant Links

  • DOL website on NPRM

– http://www.dol.gov/whd/overtime/NPRM2015/

  • Crowell & Moring Client Alert:

– http://www.crowell.com/NewsEvents/All/Propose d-FLSA-Regulations-More-Than-Double-Salary- Threshold-for-Exempt-Employees

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Contacts

Thomas P. Gies tgies@crowell.com 202.624.2690 Christopher Calsyn ccalsyn@crowell.com 202.624.2602 Andrew Bagley abagley@crowell.com 202.624.2672

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