ACtion Magazine - March 2016 - (Page 10)

DOL proposes signiﬁcant changes A s former President William Clinton said while campaigning for President, "It's the economy stupid." The first question asked of the Republican candidates at their first debate was whether or not each of them supported the raising of the federal minimum wage. Every registered voter in the United States will get a chance to vote accordingly later this year based in part on his or her feelings about the answer to that question of the candidate who gets the Republican nomination. The Federal Fair Labor Standards Act ("FLSA") is the law which guarantees a minimum wage and overtime pay at a rate of not less than one and onehalf times an employee's regular rate for hours worked over forty hours in a workweek; provided an employee is not exempt from that overtime pay requirement. As a general rule, the FLSA applies to employees of businesses that have an annual gross volume of sales made or business done of $500,000 or more. There is no exemption from the FLSA for non-profit organizations. Nothing in the proposed regulations of the DOL will change the applicability of the FLSA to either the dollar volume or a business's non-profit status. Last summer, the Wage and Hour Division of the United States Department of Labor (the "DOL") published proposed regulations under the FLSA to revise the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees; the so-called white collar exemption. As required when changes to (or new) regulations are proposed, public comment was sought by the DOL. The current regulations have required that all three of the following tests must be met before the employee satisfies the white collar exemption: (1) the employee must be paid a predetermined and fixed salary 10 ACTION * March 2016 that is not subject to reduction because of variations in the quality or quantity of work performed; (2) the amount of salary paid must meet a minimum specified amount; and (3) the employee's job duties must primarily involve executive, administrative, or professional duties as defined by the regulations. The duties of the position are relevant, not the job title assigned to an employee. The last setting of the minimum salary for the white collar exemption occurred in 2004. Under the proposed regulations (if adopted by DOL as proposed), the salary threshold will be raised from $455 a week " ...final regulations on these issues will not (likely) come out until 2017. (the equivalent of $23,660 a year) to about $970 a week ($50,440 a year) for 2016. According to the Leadership Conference on Civil and Human Rights, the poverty line for a family of four living in the United States in 2015 is $24,250. In its notice about the proposed regulations, the DOL also solicited comment on whether or not there should be modification of the "duties test" or if it currently works as intended to screen out employees who are not bona fide executive, administrative, and professional employees. Not surprisingly, the DOL has received many comments on its proposed regulations. Also not surprisingly, there have been comments strongly in favor of, and in opposition to, the proposed regulations. One argument raised in comments in opposition to the proposed regulations is that the DOL underestimates the fact that employers will simply hire more employees and have them perform non-overtime Keith Leonard, Esquire work rather than have their existing nonexempt (from overtime regulation) work force perform overtime work. Of course, the optimist would say in response that such an approach is good because it will create more jobs. The Economic Policy Institute's comments posit that the proposed regulations will restore or strengthen overtime protections for some 13 to 15 million salaried workers. Thus, as with any proposed change to our laws, a person can find reasons to argue for or against the potential change. When changes to the overtime regulations were proposed for 2004, labor unions sought increases in the minimum salary levels necessary to be considered exempt, while business interests lobbied for an overhaul of the "duties" test. Similarly, there has been (and likely will continue to be) a split of views on whether or not increasing the minimum wage will spur a growth in jobs. Since 1978, the minimum wage has been increased eleven times, and there has been job growth for a sustained period six of those times. The current prediction is that the final regulations on these issues will not come out until 2017. ❆ Remember that laws are constantly changing and are often not uniform throughout the United States. Do not place unqualified reliance on the information in this article. Always contact legal counsel for detailed advice. If you have a particular issue, law or problem you would like to see addressed in a future column, please contact me at KLeonard@LeonardSciolla. com, or Leonard, Sciolla, Hutchison, Leonard & Tinari, LLP, 215-567-1530.

Table of Contents for the Digital Edition of ACtion Magazine - March 2016

ACtion Magazine - March 2016
Contents
Defining 'Service Ready' Because it Matters
Motor Age Top Shops
Outlook
Service Port
Leonard's Law
VIrtual View
Last Watch
Member Profile
Cooling Corner
Industry News
Association News
In Memoriam

ACtion Magazine - March 2016