The proposed rule’s provisions will be revealed only when the OMB reviews the regulations and approves them for publication in the Federal Register. In certain sessions with stakeholders, the DOL has focused on the required salary level to be exempt and changes to the primary duty test. Recommendations on salary level increases have ranged from $42,000 to $61,000 but it will probably come in under $1,000/week. It is also thought that the rule may switch the primary duty test with something more flexible, such as nonexempt duties having to be less than 40 or 50 percent for a worker to still be classified as exempt.
At the present time, California has a ‘greater than 50% quantitative standard’ and that is one alternative that has been considered. This means that exempt duties have to be more than half of a worker’s responsibilities for the employee to be considered exempt.
An OMB ruling typically takes anywhere from four (4) to eight (8) weeks but can be a shorter or longer time depending of a variety of reasons.
Another possible change that the Wage and Hour Division may make in the proposed rule may include eliminating the ability (no more having employees hourly or salaried when it suits the employers or at the ‘owners’ discretion….hmmm…novel idea, isn’t it?) of employees under the executive exemption to perform exempt and nonexempt duties concurrently. Another thing that is being bantered about is the return of the 20 percent test for the outside sales exemption, which was removed in the 2004 regulations. There is also talk of indexing the minimum salary to the consumer price index, something that could put the white-collar exemptions largely out of reach in certain rural areas.
Until we have these new rules/regulations passed on to us, companies should make sure that they have accurate and current job descriptions, especially for positions currently classified as exempt. This will facilitate the analysis that companies will have to undertake to assess compliance under the new regulations….whatever they may be.
Please also take a look at your current exempt workforce and develop an understanding of which exempt positions might be in the zone for reclassification if the salary threshold increases exponentially…even in $5,000 increments. Also, these increases could have a significant impact on your business and you should consider how you are going to respond to these changes.
Also, most (optimum word here) employers care about how they are perceived by their employees. Try to have something prepared for the employees prior to these new rules/regulations being released. The average employee is relatively cognizant of how they are paid and what they are paid….even when they comply with an employer’s directive, no matter how outlandishly ridiculous it may be. For good and growing professionalism all the way around, please have something in writing for your employees ready to go with short notice informing them of the NPRM (notice of proposed rulemaking) and remind them that nothing is set in stone until the DOL has a final ruling.
If you have any questions regarding the proposed regulations or if you need explanations regarding interpretations or have any other Human Resources’ consulting needs, please contact me, Rosanne Bennett, at email@example.com or at 484-798-1236.