On December 1, 2016, the new salary requirements for exemptions pursuant to the Fair Labor Standards Act, 29 U.S.C. §213(a)(1), which exempts bona fide executives, administrative personnel, professionals and outside sales employees from the minimum wage, overtime and record keeping provisions of the Act become effective.
The Department of Labor holds that the new salary levels are beneficial to millions of workers. Not everyone agrees. Twenty one states have filed suit claiming the salary increases to be unconstitutional and fail to take into account congressional intent, among other criticisms. An injunction is sought to prevent the new rule from going into effect.
Whether the suit will be successful for the reasons cited is open to question. In Section 213(a)(1) of the Act, Congress specifically granted the Secretary of Labor the authority to define and delimit the terms of the exemptions by regulations, subject to the provisions of the Administrative Procedures Act. The constitutionality of the Act has long been settled.
Nevertheless, employers have options regarding coming into compliance, aside from raising salaries to the new level, and it would seem wise to consider those options regardless of whether the suit is successful. The salary level is only one test, and all the tests must be met to make any specific exemption valid. Compliance with the tests for exemption, other than salary, will be required regardless of the outcome of the lawsuit.
Some helpful resources:
- U.S. Department of Labor, Wage and Hour Division Fact Sheet
- Guidance to Private Employers
- Guidance to Non-Profit Organizations
For practical solutions to this and many other problems in employment law, be sure to attend the 2016 Employment Law Institute West in Pittsburgh on Thursday and Friday, November 17-18. Now in its 20th year, the Institute offers over 35 great sessions, a superb faculty, and tremendous resource materials. Register today!