The day has arrived! The US Department of Labor’s (DOL) Notice of Proposed Rulemaking, revising the Fair Labor Standards Act (FLSA), has been published in the Federal Register. Thus, the public comment period is open for 60 days (to May 21, 2019). For a short overview of the changes, you can read my previous post here. While I recognize most of you reading this will not make a public comment, that date is more important to know when the period will end, so that we have an idea of when it may be finalized into a final rule.
So, what should employers do with this information? Well, if you are about to do performance reviews/raises, and your salaried employees are making less than $35,308, you may want to consider an additional increase to at least that amount to starve off future issues concerning the exempt status. Similarly, you can budget for it now if need be. Once the proposed rule becomes a final rule, employers may raise salary levels or, if that is not possible, reorganize workloads, adjust work schedules, or spread work hours in order to avoid paying overtime (by having employees not work more than 40 hours per workweek). If, when you are reviewing your workforce, you determine an employee may be misclassified based on the duties test (and who is making less than $35,308), the new rule may be the perfect reason if you want to err on the cautious side and bring the employee back to a non-exempt status. If that is the case, don’t feel bad. The DOL estimates approximately $2M employees will likely fall under that umbrella. Thus, the DOL cautions that those employees will have a better position for a violation of the FLSA, as they will not meet either the duties test or the salary test. Lesson here – if you haven’t performed a self-audit in the past few years, it is time.