November 30, 2015
On November 20, 2015, the Obama Administration released its fall 2015 Regulatory Agenda. The Agenda revealed that the U.S. Department of Labor (DOL) has pegged July 2016 as the anticipated date to publish the final rules raising the salary for the Fair Labor Standards Act (FLSA) salary exemptions.
In fact, the Wall Street Journal reported that Patricia Smith, U.S. Dept. of Labor Solicitor, announced in an American Bar Association panel discussion that she does not expect the DOL to issue its final rule raising the salary threshold for FLSA salary exemptions until late 2016. Apparently, the DOL received over 290,000 comments, so the rule will not take effect at the beginning of 2016, as initially anticipated.
The initial version of the final rule offered for comment in July 2015 (80 FR 38516) proposed to raise the annualized salary an employer would have to pay an executive, administrative, or professional employee to exempt them from overtime pay to an amount indexed to the 40th percentile for full time salaried workers, then pegged at $921 per week, or $47,892 per year and projected to equal $970 per week, or $50,440 in the first quarter of 2016. The implementation date of the rule would occur sometime after the rule is finalized – e.g., “late” 2016.
EMPLOYER TAKE-AWAY
The agenda is not binding and rules can be released ahead of schedule, or months later. However, the agenda is the first official comment on the release schedule for the final regulations since the comment period closed on the proposed rule in September. A prudent employer should use the delay to analyze its exempt positions in order to evaluate what changes, if any, will be necessary in the event that the final rule is implemented in late 2016.