Original Publish Date: January 7, 2016
On June 30, 2015, the U.S. Department of Labor’s (“DOL”) proposed changes to the Fair Labor Standards Act’s (“FLSA”) white-collar exemption rule, which would raise the salary threshold for exempt employees from $23,660 or $455 per week, to $50,440 annually or $970 per week. The proposed change also includes automatic period increases to the salary threshold. Statistics show that, if adopted, these changes will affect approximately 4.6 million employees that are currently classified as salary-exempt, including a large number of employees in the health care industry.
The comment period for the proposed changes ended on September 4, 2015. It was initially expected that the final regulation would be announced in early 2016—however, given the voluminous number of comments received, the DOL does not anticipate issuing a final rule until July 2016. Once issued, the changes will be effective within 60 to 120 days. Health care management should thus start looking internally at their operations in order to begin to understand the potential implications of the proposed rule changes.
Below are several steps establishments can take, and pertinent questions to consider, or order to be prepared:
There is no doubt that these changes will impact nearly all organizations and industries in the coming year. Employers should be proactive in planning and budgeting for these changes in order to ensure compliance. Further, taking adequate steps now can help minimize any potential negative implications when the new rule finally becomes effective.
This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.
Taylor Burras is an attorney at Michelman & Robinson LLP, a national law firm with offices in Los Angeles, Orange County, San Francisco, Sacramento and New York. Ms. Burras may be reached at 310.564.2670 or by email at firstname.lastname@example.org.