09/04/2019
Over Time Rules Need Action
Recently, the Department of Labor (DOL) requested information as it considers revising the Fair Labor Standards Act (FLSA) to update the exemption from minimum wage and overtime pay (of 1.5 times their regular pay rate) for “executive, administrative, professional, outside sales, and computer employees.”
The existing rule defines exempt workers as those who are salaried employees working in “a bona fide executive, administrative, or professional capacity.”[1] Generally speaking, exempt employees were paid a salary that met a certain minimum level (the salary level test), and exempt workers performed duties that were of an executive, administrative, or professional nature. The current regulations have not changed since 2004.
The recent information request proposed a new rule that updates the standard salary level to reflect growth in wages and salaries and allows incentive payments, like commissions, to count toward up to 10 percent of the standard salary level. The DOL’s intention going forward is to propose updates to the salary threshold every four years.
This proposed rule would apply the 2004 methodology to current data (the DOL anticipates using 2018 data in the final rule). Allowing incentive payments like commissions to count toward up to 10 percent of the standard salary level is meant to modernize the rule to more accurately reflect current employment practices. The current proposed salary threshold of $679 per week keeps the 2004 methodology, while updating the level to reflect wage growth since 2004. Would you like to see a greater percentage of—or even all—commission recognized as income for overtime purposes. If yes you should contact your congressman or the DOL.
