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Proposed white-collar exemption rule on track, advances to OMB review

May 19th, 2015  |  David Stephanides

As reported in Employment Law Daily on May 7, 2015, the Department of Labor, Wage and Hour Division has submitted its proposed white-collar exemption rule to the Office of Management and Budget (OMB) for review. The DOL has reviewed and made proposed revisions to the FLSA regulations that govern overtime pay eligibility at the direction of President Obama’s March 2014 memorandum to the agency.

Exactly what revisions have been made to the regulations are unknown at this time and will not be publicly available until the OMB completes its review and the DOL releases its proposed rule for public comment. While there is no minimum time period, the OMB’s Office of Information and Regulatory Affairs may take up to 90 days to review a proposed rule, with a one-time extension of not more than 30 days.

In the meantime, Noel P. Tripp, of the law firm Jackson Lewis, has penned an open letter to the DOL concerning its pending revisions. Tripp offers five suggestions that he stresses “would ensure more streamlined compliance with the FLSA’s requirements and reduce litigation and uncertainty for both employers and employees alike. This whole process serves no purpose if clarity is not provided for all stakeholders.”

Of Tripp’s five suggestions, I’ll highlight two here. First, he targets IT workers and suggests that the exempt status of these workers should be addressed “holistically” across the administrative, learned professional and computer professional exemptions. “These regulations desperately need to be modernized. The Department should define the duties test associated with all three of these exemptions to recognize that most information technology work, like the work of other white collar exempt employees, is exempt-level work.”

Second, Trip desires a de-emphasis of the duties tests and an increasing reliance on the compensation and salary basis prong in determining exempt status. “The DOL should establish a salary level that if met, qualifies for an exemption, regardless of duties. This standard could be calibrated with compensation levels based on cost of living data, perhaps that used by the federal government.”

For the remaining three insightful suggestions that strive to modernize very antiquated regulations, see Tripp’s post here.