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As we have discussed in the past, to be eligible for one of the “white collar” exemptions (executive, administrative, or professional) or as a highly compensated employee (HCE), Section 541.600 of the FLSA regulations requires employers to compensate employees on a salary basis (currently $455 for white collar exemptions, but likely rising to around

Note: This post relates to the Department of Labor’s proposed rules issued in 2015. For a summary of the final rules issued May 18, 2016, please check out this post, and see this post for a link to the recording of our May 23, 2016 webinar.

This morning, the Department of Labor’s Wage &

In our last post, we looked at the rules governing volunteers at for-profit entities. As we discussed, for-profit organizations have almost no latitude to accept volunteer services. However, nonprofit employers face a more relaxed regulatory scheme under the FLSA when it comes to volunteers. Unlike their for-profit brethren, nonprofit employers can accept volunteer services

On Tuesday, we discussed Congress’s passage of the Consolidated and Further Continuing Appropriations Act, 2015, nicknamed CRomnibus in the waning days of the 2014 legislative session. The omnibus spending bill avoided another government shutdown and funded most federal agencies (save for the Department of Homeland Security) through the end of the federal government’s  fiscal year

Cash.gifThe saying goes that “Cash is King.” However, entrepreneurs often quickly learn (sometimes in painful ways) that it is Cash Flow that is really King. Run a quick Google search for “accounts receivable” financing or factoring to get a sense of how important that market is for businesses. Working for a telecommunications manufacturer, I can

Late last month, the Senate referred the Fiscal Year 2015 Defense Appropriations Act to the Senate Committee on Appropriations for consideration. The House of Representatives passed its version (H.R. 4870) on June 20 with substantial bipartisan support, 340-73, after considering 80 different amendments. Since this is a wage and hour blog, you can

White Collar 925264.jpgLast month, the U.S. Court of Appeals for the Eighth Circuit issued an opinion that essentially watered down the Fair Labor Standards Act (FLSA) overtime exemption for executives. This decision perhaps makes an unwitting case for President Obama’s intended overhaul of the FLSA’s white collar exemptions that we discussed recently.

An employer must satisfy four elements to take advantage of the FLSA’s executive exemption:

  • The employer must pay the worker a salary of at least $455 per week;
  • The employee’s primary duty must be management;
  • The employee must customarily and regularly direct the work of two or more employees; and
  • The employee must have the authority to hire or fire employees, or at least have the ability to offer suggestions and recommendations as to hiring, firing, advancement, promotion, or other status changes for employees, with the employer giving particular weight to those suggestions.  29 CFR § 541.100

This four-element standard is what remained after the Department of Labor’s 2004 revisions to the FLSA regulations that ditched what were then known as the “long test” and the “short test” under the former regulations. The long test had a lower salary basis and also required the employee to have regularly exercised discretionary powers to have devoted no more than 40% of their workweek to activities not directly and closely related to management. 29 C.F.R. § 541.1 (2003). The short test used a higher salary basis, but only required employees to regularly direct two or more employees and to have a primary duty of management.  Id.

Because there is no objective test for determining what an employee’s “primary duty” is or what “particular weight” means, this has led to substantial litigation, including the Eighth Circuit’s Madden v. Lumber One Home Center decision last month.


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In an unexpected move, the Obama administration officially announced today that it will issue a Presidential Memorandum to the U.S. Department of Labor (DOL) instructing its Secretary to update regulations regarding overtime protection for workers under the FLSA. Any changes to the regulation would be the first since 2004, when the Bush administration increased the