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
The New FLSA Regulations: What Changed, What Didn’t, What’s Next for Employers
New FLSA Regulations Released, Salary Threshold Doubled
UPDATED: For an updated entry, click here.
Since last spring, we have been following developments in the oft-delayed Fair Labor Standards Act (FLSA) regulations rewrite by the Department of Labor (DOL). The Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) has now completed its review, and the Department of Labor
Wage and Hour Basics Series: Penalties for FLSA Non-Compliance
Periodically this year, we have discussed some of the fundamentals of wage and hour law, starting with a general review of the white collar exemptions. We will continue to periodically review some of the more fundamental concepts of the FLSA, including a comprehensive review of the new FLSA exemption rules that we expect the
9th Circuit Splits with 4th, 5th Circuits, Finds Auto Dealer Service Advisors Not Exempt Under FLSA
Reversing a district court decision, and declining to follow decisions from a number of other courts, including the Fourth and Fifth Circuits, the Ninth Circuit has deferred to the Department of Labor’s (DOL) “flip-flopped” view of whether the FLSA’s exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles,” applies to
Lesser Known Exemptions: The “Ministerial” Exception to the FLSA
Last week, in my post about the impact of the various iterations of the Religious Freedom Restoration Act (RFRA) on wage and hour law, we discussed the general rule that the FLSA does not contain blanket exceptions or exceptions for religious entities or individuals, with only a few exceptions. One potential caveat to this rule
Hints About New FLSA Regulations Begin to Emerge: Minimum Salary May Double
Last 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
DOL Makes It Official: New FLSA Regulations Delayed Until 2015
Back in late May, we told you that the Department of Labor had released its required Semiannual Regulatory Agenda. The Agenda, which is not binding on the DOL, included several FLSA-related items. Most importantly, the DOL listed its plans to address the “white collar” overtime exemption regulations with proposed rules next month, in
White Collar Exemptions: Paying Employees Wages in Equity, Rather than Cash
The 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
I’m an Executive, You’re an Executive, We’re All Executives! 8th Circuit Lowers the Bar for FLSA “Executive” Exemption
Last 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.Continue Reading I’m an Executive, You’re an Executive, We’re All Executives! 8th Circuit Lowers the Bar for FLSA “Executive” Exemption