Home Health & Hospice Week

Big salary threshold jump for white-collar exemption in flux.

The legal and regulatory back-and-forth on the so-called white-collar exemption requirements isn't over yet.

Recap: On Oct. 30, 2017, the U.S. Department of Labor appealed an August 2017 federal district court's ruling "that invalidated the previously proposed white collar exemption rule to the Fifth Circuit Court of Appeals (covering Louisiana, Mississippi, and parts of Texas)," notes attorney Scott Cruz with law firm Clark Hill in Chicago. "With its appeal, the DOL simultaneously requested that the Fifth Circuit 'hold the appeal in abeyance while the Department of Labor undertakes further rulemaking to determine what the salary level should be,'" notes Cruz on the firm's website.

The Obama administration's change "would have more than doubled the minimum salary requirement for the major white-collar exemptions ... from $455 per week to $913 per week," explains attorney Steven Pockrass with law firm Ogletree Deakins in Indianapolis. "Annualized, that would have been an increase in the salary threshold from $23,660 per year to $47,476 per year."

Employers "applauded" when the judge "issued the nationwide injunction" raising the exemption's salary threshold, says attorney Elizabeth Gross with law firm Polsinelli in St. Louis. "Employers were further encouraged when the DOL published a Request for Information (RFI) regarding the overtime final rule in July of 2017."

Keep an eye out: "Employers now await the possibility of a new rule, almost certainly with a substantially lower minimum salary," says attorney Jeffrey Brecher with law firm Jackson Lewis in Melville, New York.

The DOL's appeal "appears designed to provide additional time to rewrite the overtime rule," says Cruz. How long until you see the new rule? It may be a while.

"The DOL rulemaking process grinds on," note attorneys Dale Hudson and Jeffrey League with law firm Nixon Peabody. The DOL now is sifting through the approximately 214,000 comments it received when it requested public input on the matter back in July.

"The Department is reviewing those submissions," the DOL confirms on its website.

The agency "has not announced when it will publish a proposal," Hudson and League note. "Thus, employers should not expect a new rule anytime soon."

Guesstimate: Secretary of Labor Alex-ander Acosta "has publicly stated that he would be open to increasing the minimum salary level to something around $33,000," Hudson and League offer in analysis posted to the firm's website. "Thus it would not be surprising if the DOL ultimately adopts a salary level in that range."

Pockrass says "Acosta has indicated that he would favor a salary threshold that annualizes to somewhere between $30,000 and $35,000 per year." Cruz anticipates the "low $30,000 range."

Don't forget: You must comply with state and local wage-and-hour laws in the meantime. "Some states, such as California and New York, impose higher minimum salary levels" than the current exemption, Hudson and League point out.