Risk & Business Magazine Spectrum Insurance Magazine - Spring 2019 | Page 8

OVERTIME REGULATIONS
TRUMP’S DOL SPLITS
THE BABY IN NEW
OVERTIME
REGULATIONS
D
uring the Obama presidency,
the Department of Labor
(DOL) proposed significant
changes to the rules
implementing the so-called
“white collar” exemptions to the Fair Labor
Standards Act (FLSA). Under the FLSA,
employees are considered hourly, with
overtime premiums required for hours
worked over 40 in a week, unless they
are paid by salary and their job duties fit
into one of the exemptions—executive,
administrative, or professional (EAP).
In 2015, the Obama Administration
had proposed doubling the current
minimum annual salary of $23,660 (weekly
compensation of $455) to $47,476 ($913 per
week). Employers throughout the country
scrambled to address whether employees
who were making between $24,000 and
$48,000 should continue to be treated as
salaried which, of course, meant increasing
their salaries, or whether they should be
treated as hourly employees which meant
that they would be paid time-and-a-half
for all hours worked over 40 in a week. A
number of employees were converted
to an hourly basis and another group
of employees received significant salary
increases to get them over the new annual
minimum.
Then came November of 2016. Donald
Trump was elected President, and more
importantly for the purposes of this
discussion, just prior to the finalization of
the rule, a federal district court enjoined
8
BY: STEPHEN L. WELD
PRESIDENT OF WELD RILEY
the DOL’s enforcement of the Obama
Administration’s proposed overtime
regulations.
The DOL went back to the drawing board,
and in March of 2019, it finally published
proposed revisions to the FLSA’s regulations.
These proposed regulations are not yet final
as there is a 60-day public comment period.
It is anticipated that the proposal will, with
minor changes, become final regulations in
early 2020.
The Trump proposal basically splits the
difference between the current minimum
annual salary and the Obama proposal.
The new proposal defines the proposed
minimum annual salary to qualify for a
salaried basis as $35,309 (or $679 per week).
In addition, 10 percent of the salary can be
satisfied with nondiscretionary bonuses,
commissions, and other incentives. Further,
while the DOL will review the salary
basis every four years, it will not result in
automatic increases as proposed by the
Obama Administration.
Another proposed change is that highly
compensated employees—those who
currently make over $100,000 per year—
have relaxed job duty requirements to
qualify as salaried. The Trump proposal
significantly increases the minimum to
$147,414.
If the Trump proposal becomes law,
employers will have to look at whether the
job duties of those employees making over
$35,000 per year qualify them for a “white
collar” exemption. If their job duties justify
it, they should be returned to a salaried
basis. In addition, employers will have to
address its treatment of those employees
making between $100,000 and $150,000. If
the Trump proposal is approved, a number
of employees who earn six-figure incomes
will be entitled to overtime pay. +
*This article should not be construed as legal advice and is
intended for general information purposes only. If you have
any questions regarding this article, you should consult your
legal counsel.
Attorney Steve Weld is President of Weld Riley,
S.C. Eau Claire. Steve’s practice emphasis is
management labor and employment law. He
also practices in the school, municipal, and
administrative law areas. Since 1995, he
has been selected annually for inclusion in
The Best Lawyers in America. He has been
designated a “Wisconsin Super Lawyer” since
that program’s inception in 2005. He is a
member of the American Bar Association
(Section of Labor and Employment Law);
State Bar of Wisconsin (former Director of
the Labor and Employment Law Section);
Eau Claire County Bar Association;
Wisconsin School Attorneys Association
(past President and recipient of the Tipler
Award); Counsel of School Attorneys (COSA);
Chippewa Valley Society for Human Resource
Management (past President); and St. Croix
Valley Employers Association. He has been
a contributing author to Municipal Labor
Relations in Wisconsin and How Arbitration
Works.