DOL’S PROPOSED OVERTIME RULE

The U.S. Department of Labor (DOL) had predicted it would issue its proposed new rule to overhaul the overtime regulations of the Fair Labor Standards Act in October, but we are still waiting for that proposal. 

The two areas of anticipated revision are to the salary level and duties tests for an employee to be exempt from overtime pay.  In order for an employee to be exempt, the employee must be paid a salary of at least $684 per week, and must meet certain duties tests.  The most common exemption categories are known as the “white collar” exemptions:  executive, administrative and professional.  The exempt duties generally fall within those categories, and each category has different criteria:

• Executive exemption. The employee's primary duty must be managing the enterprise or a department or subdivision of the enterprise. The employee must customarily and regularly direct the work of at least two employees and have the authority to hire or fire workers (or the employee's suggestions and recommendations as to hiring, firing or changing the status of other employees must be given particular weight). 
• Administrative exemption. The employee's primary duty must be performing office or nonmanual work that is directly related to the management or general business operations of the employer or the employer's customers. The employee's primary duty also must include the exercise of discretion and independent judgment with respect to matters of significance.
• Professional exemption. The employee's primary duty must be to perform work requiring advanced knowledge in a field of science or learning that is customarily acquired by prolonged, specialized, intellectual instruction and study.

The salary level was last adjusted effective January 1, 2020 when it was raised to the $684 per week level (equivalent to $35,568 per year for a full-year worker).  We anticipate the proposed new level will be higher.  We also anticipate some proposed changes to the duties tests.  Certain groups have been advocating for a tightening of the duties tests, claiming that the tests are currently too loose and are “toothless.”  We will advise you when the proposed test is finally issued.

Feel free to contact us if you have questions about this matter. 

John E. Falcone

www.pldrlaw.com

P.O. Box 1080

Lynchburg, Virginia 24505

(434) 846-2768