My partner Glenn Grindlinger has written a thoughtful piece on the establishment of the new salary levels for the Part 541 white collar exemptions under the Fair Labor Standards Act. Below is a link to the piece.

https://www.foxrothschild.com/publications/u-s-department-of-labor-increases-salary-threshold-for-overtime-exemptions

The Takeaway

The Chamber of Commerce has already filed suit to enjoin the new salary levels so we will wait and see what happens. The case was filed in the Eastern District of Texas, a conservative area, so the “odds” are an injunction will issue. With that said, employers must prepare–the first step, the crucial step, is to undertake an objective analysis of whether positions currently classified as exempt are, in fact, exempt. If not, this change provides a golden opportunity to change those positions to non-exempt; the new salary level gives the perfect “cover” for such re-classifications.

There is also an employee relations/morale aspect to this. I have seen, many times, where employers seek to re-classify “white collar” workers to non-exempt, or hourly, the workers rebel, even though the change may benefit their wallets. There is a psychological dividing line between “white collar” and “blue collar.” People take pride in being “salaried” and they equate re-classification with carrying a lunch pail and punching a time clock. These are real concerns and employers must be aware of them and tactfully address them.

Be aware…

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