Salary basis

The FLSA Salary Basis – An Update

The Department of Labor has finally released the updated figures for the salary basis test under the Fair Labor Standards Act (FLSA).  In the previous article regarding the salary basis test for the FLSA white collar exemptions, I noted that there was some uncertainty regarding the current state of the law.  For years, the minimum weekly salary to qualify as overtime-exempt under the white collar exemptions had been $455 a week – or  $23,660 per year.  Many commentators have called for an increase over the years and, in 2016, the Department of Labor proposed an increase to $913 per week ($47,476 per year).  This increase was struck down by the courts in November 2016, and the minimum salary basis remained $455.  Ever since then, the Department of Labor has repeatedly hinted that another increase was coming — more than $455 per week, but less than $913 per week.  This week, the updated numbers were released.

Earlier this week, the new proposed figure was finally released – $679 per week, or $35,308 per year.  This is almost exactly the midpoint of the $455 and $913 figures — in essence, the DOL has split the baby.  Interestingly, the regulation also provides for future scheduled increases, although any further increases will also be subject to public notice and comment period before going into effect.

Notably, though, the $913 figure is not effective as of today.  Under federal law, proposed changes in regulations must undergo a “notice and comment” period.  That means the public will have sixty days to submit any comments (pro or con) regarding the proposed increase.  After that period expires, employer groups are likely to file a lawsuit challenging the new regulation, just as they did with respect to the previous proposed increase.  In short, it may be months or even years before this question is settled.  In the meantime, the $455 per week salary basis will still apply.  Nevertheless, both employers and employees should be aware that this number is likely to change.

If you have any questions about the salary basis test, or the FLSA overtime exemptions in general, please call New Orleans overtime lawyer Charles Stiegler at (504) 267-0777 or email me today.