• FLSA "White Collar" Exemption Rules Are In Effect
  • August 25, 2004 | Author: John E. Thompson
  • Law Firm: Fisher & Phillips LLP - Atlanta Office
  • The "grace period" has ended. The U.S. Labor Department's new regulations defining the Fair Labor Standards Act's executive, administrative, professional, and outside-sales exemptions are now in effect. The FLSA "white collar" exemption status of an employee will now be decided under the revised rules. To review the official publication in the Federal Register, click here. Additional Labor Department materials can be accessed at www.dol.gov/fairpay.

    Of course, Congress might eventually take action aimed at reversing the effects of those regulations. In May, the U.S. Senate voted to limit the impact of these provisions by passing two different, freestanding measures which are generally intended to keep the pending regulations from affecting the status of an employee who was nonexempt under the regulations as they existed on March 31, 2003 (the date the proposed regulations were originally released for public comment). One version is stated in very general terms, while the other focuses more on a long list of particular occupations. Both would leave in place the coming increase in the salary test to an annualized $23,660. If either of these bills becomes law, the application and interpretation of the "white collar" exemptions will become substantially more-confusing, less-certain, and more dispute-prone than ever before. Fortunately, the Senate cannot impose these limitations unilaterally, and a number of trade associations and other employer-oriented groups are making vigorous efforts to keep these provisions from being enacted.

    When Congress reconvenes in September, these proposed amendments are likely to be back on the front burner. Also, opponents of the new regulations have said that they again plan to push spending-bill proposals designed to block the rules' enforcement in any way that would cause more employees to qualify for exempt status (the salary increase probably would not be affected). And there continues to be at least some talk of an effort to invoke the Congressional Review Act to undo the changes altogether.

    Employers should continue to follow political developments in Washington. The battle over these exemptions is not over, and employers will want to stay abreast of what could be increasingly fast-breaking developments so that they can make their views known to their Senators and Representatives in a timely way; proponents of the limitations can certainly be expected to do so.

    Despite this continuing uncertainty, any employers who have not already evaluated where they stand should move ahead with this immediately. Among the best first steps are (1) ensuring that you have detailed, accurate, up-to-date information about what your exempt or potentially-exempt employees' job duties actually are; (2) evaluating whether similar exemptions from the overtime laws of other jurisdictions in which you employ people will or will not be affected by these changes; and (3) looking into whether your other pay practices are in compliance with all applicable wage-hour laws.