The United States Department of Labor officially published its Request for Information (RFI 1235-AA20); Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, today. In doing so, the DOL expressly acknowledged many employer’s concerns that the previously-set salary threshold of $913 per week was too high, it inappropriately excluded too many workers from the exemption who otherwise would pass the standard duties test, and it adversely impacted low-wage regions and industries. Accordingly, the RFI is intended to gather additional data regarding how the December 1, 2016 regulations affected employers and employees, and how the regulations could better be updated moving forward.
The RFI can be found at regulations.gov, where comments may be electronically submitted with a single click. Given the pending litigation in the District of Texas and the 5th Circuit Court of Appeals, the DOL is merely asking for public comment at this time, versus publishing a formal Notice of Proposed Rulemaking. The DOL acknowledges that the RFI is issued consistent with President Trump’s February 24, 2017 Executive Order 13777, “Enforcing the Regulatory Reform Agenda” which tasks federal agencies to identify regulations for repeal, replacement, or modification which meet certain requirements, such as hindering job growth.
The DOL is asking employers to weigh in on eleven (11) questions (summarized below):
- Should the DOL simply update the 2004 salary level ($455/wk) for inflation?
- Should multiple salary levels be created, and if so, how (size of employer, region, etc.)?
- Should there be different salary levels for executive, administrative and processional (as it was prior to 2004)?
- Should the DOL return to using the long and short test salary levels (and would the duties test need to change if so)?
- Does the 2016 salary threshold ($913/wk) in effect negate the duties test? And if so, at what threshold does it not negate the duties test?
- What actions did employers take to prepare for the December 1, 2016 regulation (i.e., increase salaries, change hours, reduce pay, etc.)?
- Would it be preferable to base exemptions on duties only (no salary threshold)?
- Does the $913/wk threshold exclude occupations traditionally covered as exempt?
- Is the 10% non-discretionary bonus and incentive payment credit towards satisfying the salary threshold appropriate?
- Should the highly compensated thresholds have multiple levels, and if yes, how (i.e. size of employer, region, etc.)?
- Should the salary levels be automatically updated periodically, and if so, how/when?
The public has until September 25, 2017, to submit comments. Following the close of the comment period, employers can expect more waiting, as usual. It appears from the RFI that the DOL will not be issuing a Notice of Proposed Rulemaking while the cases are ongoing, so as is the norm, we will continue to wait.