No extension for you! Employers – brace for the impact of the new DOL overtime rules

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The US Department of Labor’s (DOL) Wage and Hour Division Administrator David Weil reportedly told Congress on Monday that the agency will not extend the 60-day public comment period for its proposed regulation narrowing the executive, administrative, and professional exemptions from the Fair Labor Standards Act (FLSA).  The comment period will close on September 4, 2015. 

We gave you a first look at the impact of the DOL’s proposed regulation shortly after its July release, highlighting its two centerpieces: (1) an increase in the salary threshold, and (2) the possible adoption of California’s “primary duties” test.  With a final rule approaching, employers should plan and prepare for its effects sooner rather than later. 

Among other things, employers should consider conducting an audit of their current exempt workforce to determine which employees will be affected by the DOL’s new regulation.  As a starting place, employers that would like some or all of the currently exempt employees to remain exempt after the new rule takes effect should be prepared to increase the salaries of exempt workers who earn less than $50,440 per year.  For those exempt employees earning less after the new rule’s effective date, employers may want to consider how to limit their working hours to avoid overtime liability.  A close examination of exempt employees’ daily job duties will help with preparations for any changes to the “duties” or “primary duty” tests.  Are the employees engaged in the performance of exempt tasks only two percent of their working time?  Ten percent?  Fifty percent?  Ensuring reliable collection and analysis of these data will be critical to making the nimble adjustments sure to be necessary when the DOL issues its final rule amending the “white collar” overtime exemptions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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