iStock_WageIncrease.XSmall.jpgLast spring, I made some predictions about what the new FLSA regulations would likely include when they were finally released. The regulations were delayed, but what we expect hasn’t changed, as I explained in November. On Twitter this past Friday (and you should be following @WageHourInsight, if you aren’t already), I highlighted an article that gives employers the first glimpse at what the Obama administration has planned.

According to the Fall 2014 Agency Rule List, the DOL’s “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees” regulation should be ready within the next month. The regulation is intended to implement President Obama’s directive to modernize and streamline FLSA regulations for executive, administrative, and professional employees.

As I noted from the beginning, any revised regulations will include an increase to the $455 minimum weekly salary threshold for exempt workers. At $455/week, workers earning as little as $24,000 per year currently meet the minimum salary threshold. Last year, the White House observed that just 12% of salaried workers now fall below this threshold, compared to 65% in 1975 when the regulations set a $250/week minimum. California and New York already require employers in those states to pay higher minimums to meet the exemption ($600 in New York, increasing to $675/week by 2016; $720/week in California, increasing to $800/week by 2016).

In the last week, we have seen the first hints of the administration’s apparent plans for changes to the white collar exemptions. Specifically, the Huffington Post reported that the administration is “leaning toward” setting the minimum salary for the overtime exemption at $42,000 per year (just over $800/week), roughly in line with California’s 2016 threshold. Ross Eisenbrey, a former Capitol Hill staffer and OSHA administrator who is now a vice president for the left-leaning Economic Policy Institute (EPI), has pushed for a $51,000 threshold, but says administration sources have told him that they plan to advance the more “modest” 75% increase to $42,000. The same article notes that the DOL’s chief economist, Heidi Shierholz, advocated when she was at EPI just before joining the DOL last August that the administration should increase the minimum salary to $58,000 ($1,115/week). Democratic Senators have lobbied the administration for an increase to $54,000.

A substantial increase even to the anticipated $42,000 would have the most impact on production, service and retail industries that have substantial numbers of low paid supervisors. As we learn more over the coming weeks, we will keep you up to date. Of course, we will provide a full analysis of the proposed regulations once they are released.