If you read this blog regularly, you know that since last spring, we have been telling you about what to expect from the new Fair Labor Standards Act regulations. The regulations were delayed, but what we expect hasn’t changed, as I explained in November. 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 this month. The regulation is intended to implement President Obama’s directive to modernize and streamline FLSA regulations for executive, administrative, and professional employees. Although the calendar has changed to February, the page where the regulations, or at least a final release date, would be announced has yet to change.
We can be relatively certain that the revised regulations will increase—and probably substantially—the $455 minimum weekly salary threshold for exempt workers ($455 per week translates to $23,660 per year). That prediction is supported by the almost weekly publication of various groups’ attempts to lobby the Obama administration for a new, substantially higher salary threshold.
As we noted late last month, Ross Eisenbrey at the Economic Policy Institute, a union-aligned think tank, gave an interview to the Huffington Post advocating for a $51,000 threshold, but noting that administration sources told him that they had planned a more “modest” $42,000 threshold. Around the same time, EPI posted a letter signed by EPI president Lawrence Mishel, Jared Bernstein, an economist from the Center on Budget and Policy Priorities, and a group of economic professors that it had sent to Secretary of Labor Thomas Perez. The letter referred to “various proposals” circulating in “the media” that recommended salary levels as low as…the same $42,000 cited by EPI’s own Eisenbrey. The EPI letter pushed for a $50,000 salary threshold, nearly identical to Eisenbrey’s, that would “restore the 1975 threshold, adjusted for inflation.” To bring things full circle, Eisenbrey and Bernstein have teamed up before, too. In December 2013, on the occasion of the 75th anniversary celebration of the FLSA, they presented a paper to the DOL proposing a significant expansion of eligibility for overtime pay and arguing for a $50,440 threshold.
Eisenbrey’s comments and the EPI letter must have raised eyebrows on Capitol Hill, too. Representative Mark Takano (D-CA), sent a letter signed by 31 House Democrats to both President Obama and Secretary Perez. Rep. Takano’s letter endorsed political activist Nick Hanauer November essay in POLITICO Magazine, which argued that the FLSA’s salary threshold should increase to at least $69,000.
Finally, a group of 25 Democratic Senators, along with Senator Bernie Sanders (one of the independent senators who caucuses with the Democrats) sent a letter to President Obama last week requesting that the DOL increase the salary level to at least $56,680 per year. Working behind the scenes
Whether the administration settles on $42,000; $50,000; or $69,000, the increase would be substantial and have a wide-ranging impact on a range of industries, particularly in the service and retail sectors. As we continue to learn more over the coming weeks, we will continue to give you the latest scoop.