The Fair Labor Standards Act’s “white collar” exemptions specify that executive, administrative, professional, outside sales, and computer employees are exempt from the Act’s minimum wage and overtime pay laws. In order for employees to be considered exempt, they must satisfy a two-prong test: The first prong is related to their primary job duties, and the second is related to the minimum amount of salary they earn.

The last time the regulations were revised was in 2004. There is a recent USDOL initiative to dramatically raise the salary required for employer claims of exemption. The salary is proposed to rise to almost $1000 per week from the current $455 weekly. There will also be an escalator type factor incorporated, providing for (perhaps) annual increases in the salary threshold. Now, a “highly compensated employee” (i.e. exempt) need make $100,000 per annum; under the proposal that will be tied to inflation. The proposal also seeks comments/input on the duties test(s) and on the issue of whether nondiscretionary bonuses can be used to (help) meet the salary requirement (wherever it ends up).

The proposed regulations further indicate that the USDOL may want to include in the final version of the regulations some additional “examples” which will ostensibly guide businesses in determining how the exemptions should apply and the agency has asked for input on this issue. The business community must be very prudent about whether the insertion of examples is a good thing and may want to comment on this matter, one way or the other.

This is because we have seen that these “examples” may become almost too important in arriving at determinations on exempt status and may result in consequences that were not anticipated. To illustrate, there was an example given in the 2004 revisions to the regulations relating to “employees in the financial service industry.” That, some commentators opine, led to the USDOL Administrator Interpretation 2010-1 (March 24, 2010) addressing the exempt status of mortgage loan officers. This engendered even more litigation dealing with the positions set forth in the Administrator Interpretation (including a dispute about the legitimacy of the Interpretation itself that ultimately went to the U.S. Supreme Court).

In a related vein, the USDOL has asked for comments on whether “nondiscretionary bonuses and incentive payments” should be credited to at least some extent in meeting the salary test. The agency says that it would be inclined to limit any credit to no more than 10% of the salary threshold and to require settlement no less frequently than monthly. At present, the USDOL would not include commissions in this approach, but it has also invited comments on the point. Whether, in what form, and to what extent any credit mechanism might be included in final regulations are probably too speculative at this point.

Course Objectives:

Employers need to now start looking at what the analytical benchmarks will be. Put differently, for the purposes of planning for the future, it might be prudent to project and predict that the salary threshold will escalate steadily and will end up probably in the mid-50,000 range in the foreseeable future.

We will see what proposals are made to the duties component of the regulations. I think there are many that should be made, to adapt to the realities of modern day business. We will explore what these might be. Maybe an employer does not need to know all the legal nuances involved in these matters, but the webinar will teach the “art” of recognizing when such issues (and possible exposures) may be present and how they can be rectified before real trouble arises. The objective is to analyze problem areas and suggest proactive, strategic protocols and policies to address these issues.

I will provide Power Point presentation that is a virtual “law book” albeit written in understandable English that will provide employers and HR professionals with a basic understanding of what the flashpoint issues are and when they may become presenting problems.

Course Outline:

•  What Is The Current Law Regarding Exemptions;
•  The New Salary Level Proposal;
•  Use of Bonuses In Reaching The Salary Threshold;
•  Commentary On The Comments Submitted;
•  Will The Duties Test Change: The Adoption Of The “California Rule?”
•  What Classification/Salary Issues Will Not Be Impacted
•  How Employers Should Prepare: Internal Analysis;
•  Current Status/New Developments
•  The Future 

What You Get:

•  Training Reference Materials
•  Live Q&A with our Expert
•  Participation Certificate
•  Access to Signup Community (Optional)
•  Reward Points

Who Will Benefit:

• CEOs
• Business Owners and Employers
• In House Counsel
• Employers and Business owners
• Human Resources Specialists and managers
• Operations Supervisors/Managers