Employers know that the salary rule for “white collar” exemptions from President Obama’s Department of Labor (“DOL”) was blocked by a federal court last year (we blogged about that here). (UPDATE: A Texas federal court invalided the rule on August 31, 2017.) That rule would have more than doubled the salary requirement for an overtime exemption. Now, President Trump’s DOL has formally announced that it will not pursue that rule. Instead, it is soliciting comments to draft its own rule.
Employers have an opportunity to weigh in on what, if any, changes should be made to the white collar exemptions. The DOL’s request for information suggests it is seriously considering making at least some changes to the exemptions. The DOL requests comments on several questions, including:
- Should the salary threshold be tied to inflation?
- Should the salary levels be different for each white collar category (executive, administrative, and professional employees)? Or for each geographic region?
- What impact, if any, was felt among employers that raised salaries or made other changes to prepare for the rule last year before it was blocked?
- Would it be preferable to eliminate the salary threshold entirely and to rely solely on the duties tests to determine exempt status?
Depending on the answers the DOL gets on these questions, employers could see moderate or significant changes in the white collar exemptions. The comment period ends on September 25, 2017. Employers can weigh in here.