Interested parties can review and comment on the DOL’s proposed changes through the Notice for Proposed Rulemaking (NPRM) available on The comment period typically lasts for 60 days from the publication date in the Federal Register. Rep. Tim Walberg, R-Mich., asked Boughan what effect the changing rules on who is exempt from overtime have had on her employer. However, employers and workers face challenges in their long-term success when the rules governing fundamental concepts related to work are constantly rewritten. “The lack of clarity hinders both employer and worker decision-making, ultimately stifling economic growth, job creation, and the ability of businesses and workers alike to thrive in the modern economy,” she said. One solution proposed in the previous Congress would be to exclude employer-funded dependent care from an employee’s regular rate of pay, which would encourage companies to offer these benefits, Boughan noted.
An “automatic updating” provision in the proposed rules, which would annually adjust the minimum salary level, would continue to add more executive, administrative and professional employees to the ranks of those eligible for overtime pay. While the court’s invalidation of the 2016 rule will likely be relevant to whether courts will find the recently proposed rule lawful, another case may also come into play. In 2019, the DOL implemented a rule, effective on January 1, 2020, increasing the salary thresholds for exempt employees from $455 to $684 per week and the highly compensated employee salary threshold from $100,000 to $107,432 annually. Unlike the invalidated 2016 rule and the recently proposed rule, the 2019 rule did not include an automatic increase provision. In 2023, a different federal district court in Texas found that the 2019 rule did not exceed the DOL’s authority, in part, because unlike the 2016 rule, the 2019 rule did not effectively eliminate the other requirements of the FLSA.
The National Labor Relations Act worked for 90 years. Suddenly, it’s in the crosshairs
The 60 day public comment period is now closed and employers await DOL’s Final Rule which will take into account the public comments. Employers should also be mindful of state and local wage and hour laws that may impose additional requirements for exempt status beyond federal requirements under the FLSA, Hollis said. Department of Labor published a final rule, effective March 11, 2024, revising the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). Moreover, under the existing framework, both the union and employer have the right to challenge the results of a representation election. While it is not entirely clear what the ramifications of this amendment would be, the proposed language seems to suggest that employers would lose their ability to have an Article III court review the NLRB’s certification of a union as the collective bargaining representative of its employees.
To qualify for one of these exemptions, an employee must perform certain job duties and be paid a salary no less than the level presently set at $455 per week. Employees classified in the standard executive, administrative, or professional categories must receive a minimum salary (currently $455 per week) in order to be exempt from the minimum wage and overtime requirements of the FLSA. Their pay must be a fixed, predetermined amount “free and clear” for each workweek in which they perform any work. These “white collar” exemptions have been part of the FLSA since its enactment and the federal regulations interpreting them, codified at 29 C.F.R. Part 541, were revised most recently in 2004. According to the White House, these workers are often “low level” managers or clerical employees who work alongside hourly employees and only have marginally more responsibility than their overtime-eligible coworkers. As stated by the Administration, such a scenario is “unfair” and at odds with the underlying purpose of the FLSA.
New Technology: The Projected Total Economic Impact™ of Paycom’s Time-Off Requests Featuring GONE®
Finally, the Supreme Court has expressed at least some concern with the practice of federal district courts granting nationwide injunctions, and it is possible for the intermediate appellate court (the Fifth Circuit) to reverse the district court on any number of grounds. This represents a drastic change to the NLRA’s framework that has been in place since the NLRA was first signed into law in 1935. While the NLRA requires employers and unions to bargain in good faith with one another, it does not require either party to agree to any particular proposal or to otherwise make a concession. If this proposed legislation becomes law, parties would be forced, through binding arbitration, to contract proposals they would not have been obligated to accept under current law.
Professional Development: A Key Component to Your HR Career
As Florida moves forward with this legislation, it is crucial to consider the long-term implications for the state’s youngest workers and the broader societal values at stake. History has shown that child labor laws are not just about regulating work hours—they are about safeguarding the future of our youth. And as the pendulum swings toward deregulation, Florida must ensure that it protects the well-being of its youngest workers. Historically, child labor laws have been implemented to protect young workers from unsafe conditions and excessive hours, ensuring their education and well-being are not compromised. Our analysis does not include a proposed tax cut for “Made in America products” because the Trump administration has not provided sufficient information about this proposal to model it. However, cancelling the rise in the effective tax rate on FDII (see “Restore TCJA business and international tax provisions” above) accomplishes similar objectives to this new potential proposal and may be viewed as an alternative approach to the same goals.
She testified in her capacity as legislative director for the Maryland SHRM State Council. Contributed by Lauren M. Stricker, Workforce Strategies Senior Analyst for RKL Virtual Management Solutions. Lauren is experienced in compensation and labor market analysis, job analysis, recruitment and selection tool development and validation, organizational and process analyses, as well as survey development, scoring and interpretation.
The FLSA and its interpretative regulations published by the DOL, however, exempt certain groups of employees from the overtime pay requirements. One such exemption, and by far the most commonly used, relates to employees working in jobs that the FLSA describes as executive, administrative, or professional—the so-called “white collar” exemptions.29 U.S.C. § 213. This latter criterion requires a fact-intensive assessment regarding the nature of the employee’s work and specific job responsibilities. The Fair Labor Standards Act requires most employees to receive the federal minimum wage of $7.25 per hour, and overtime pay for all hours worked over 40 in a workweek. The FLSA exempts several categories of employees from the overtime requirement, including bona fide executive, administrative and professional employees.
In Appendix A, we find that these scaled back tax proposals still exceed the $4.5 trillion limit on net revenue losses in the House budget reconciliation by $800 billion. The instructions also provide for up to $300 billion in new spending from committees with jurisdiction over defense, border security, and law enforcement. We assume that increased spending on the border and national security is concentrated in the first two years of the budget window. Committees with deficit reduction targets must identify specific spending cuts within their jurisdiction. In addition, the instructions call for $500 billion in further cuts not assigned to a specific committee.
The salary threshold requirement
To be in compliance with the law, businesses should consider reassessing their independent contractor classifications under the new rule, and making changes where needed. Such changes could require increased overtime costs, as well as payment of Social Security, Medicare and other payroll-related taxes, and providing employee benefits. The U.S. Department of Labor (“DOL”) is poised to make significant changes this year to various wage-and-hour regulations interpreting the Fair Labor Standards Act (“FLSA”). The changes are expansive and include both the already released independent-contractor test and increases to the salary threshold for white collar exemptions. The expected legal challenges to the changes have already begun and will likely continue to mount.
- This new proposal would allow 16- and 17-year-olds to work more than eight hours on school nights and over 30 hours a week during the school year, without mandated breaks.
- In 2023, a different federal district court in Texas found that the 2019 rule did not exceed the DOL’s authority, in part, because unlike the 2016 rule, the 2019 rule did not effectively eliminate the other requirements of the FLSA.
- The Biden board promoted workplace democracy more effectively than any of its predecessors.
She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law. “Some businesses that cannot do either may be forced to close, resulting in unintended but predictable side effects of this government action,” he said. “The optics of two smaller gradual increases may appear more reasonable than a single larger increase, but I don’t think this will soften the impact to businesses who are already looking ahead to Jan. 1,” said Jeff Ruzal, an attorney with Epstein Becker Green in New York City. L.A. Times Insights delivers AI-generated analysis on Voices content to offer all points of view.
- In particular, employers should identify lower to mid-level managers who spend more than 50 percent of their time on non-exempt work.
- The Fair Labor Standards Act requires most employees to receive the federal minimum wage of $7.25 per hour, and overtime pay for all hours worked over 40 in a workweek.
- Department of Labor published a final rule, effective March 11, 2024, revising the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA).
- Put differently, this household is indifferent between the adoption of this policy bundle and receiving a one-time payment of $62,900 without this policy change.
The new rule will replace the 2021 rule, which gives greater weight to two factors (nature and degree of control over work and opportunity for profit or loss), with a multifactor approach that does not elevate any one factor. The DOL intends this new rule to reduce the misclassification of employees as independent contractors and provide greater clarity to employers who engage (or wish to engage) with individuals who are in business for themselves. Approximately 1 million exempt workers are between the new $43,888 salary threshold level ($844 a week) and the current $35,568 threshold ($684 per week), said Keith Kopplin, an attorney with Ogletree Deakins in Milwaukee, citing DOL estimates. Another 3 million earn at least $43,888 annually but less than $58,656 ($1,128 per week). In a news release, the DOL said its final rule would expand overtime protections “to lower-paid salaried workers.” The opportunity to be paid overtime could be meaningful for some workers. On one hand, the two-part approach gives employers the opportunity to avoid having to implement the entire jump in salary level in a short period, Bare said.
The rule represents yet another regulatory update for employers, following DOL’s independent contractor final rule and the U.S. The overtime rule cleared White House review weeks ago, though, and one source told HR Dive at the time that its publication was expected at any moment. While 2023 proved to be a dynamic year for Labor and Employment law, 2024 could be either transformative or stagnant. Some of the proposed regulations mentioned above could turn into final rules, causing significant changes in employment law. On the other hand, given that 2024 is an election year, some of these proposed regulations could lose priority and wither on the vine.
This approach is likely true to the intention or spirit of the proposed rule changes; however, it does pose a risk of creating or compounding compression issues that currently exist due to the high inflation and tight labor market over the past few years. In particular, employers should identify lower to mid-level managers who spend more than 50 percent of their time on non-exempt work. Based on this analysis, employers should consider whether to reclassify the positions that do not meet the proposed salary threshold or to increase pay levels.
The first change became effective on proposed changes to the fair labor standards act July 1, 2024, and required employers to increase the salary threshold from $35,568 to $43,888 per year. The second change, which would have increased the salary threshold to $58,656, was set to go into effect as of January 1, 2025. Likewise, DOL’s new rule increased the salary threshold for the “highly compensated” exemption, and it permitted employers to provide for catch-up payments of up to 10% at the end of the year in the event an employee’s earnings fell below the requisite threshold. The final key change under DOL’s new rule involved automatic increases in the salary threshold amount every three years based on the consumer price index, without any notice or comment period.