The DOL’s New "White Collar" Exemption Regulations: Coming Soon?
Michael W. Kulakowski, Esq. |
For some time now, the U.S. Department of Labor (DOL), the White House, and various legal experts, HR organizations, and journalists have sounded alarms about the impending changes to the Fair Labor Standards Act (FLSA) “white collar” exemption regulations (for background, see MEA’s comprehensive White collar Exemption Regulations webinar recording). Again we are being told the new rule is right around the corner: the DOL, contrary to statements made earlier this year that we need not worry until early 2017, recently sent its final rule to the White House Office of Management and Budget (OMB) for review. In the eyes of many legal and legislative experts, this move indicates that the new rule is really just around the corner.
Is this true, or just another in a series of false alarms? If history and current political events are any indication, we cannot be sure of anything. But, this is probably the closest we have ever been to an actual fire (or, in this case, to a drastic new rule governing how companies classify and pay its employees).
Here is exactly where we stand today. Judge for yourself.
The DOL’s recent move to expedite the new rule, maybe it goes without saying, is motivated by the great uncertainty surrounding the next president and his/her administration. While we have been misled before, experts are saying the final rule will be issued before Labor Day. If this happens, then what’s next? At that point, Congress will have 60 days to review the rule before it takes effect. Many legislators have already indicated that they will attempt to nullify the regulation utilizing its resolution authority. On the other hand, President Obama has counter-indicated he will veto any such nullification resolution. Watching this closely, other legislative experts have stepped in and said any such nullification resolution may not even get to the President’s desk until after Obama finishes his term. What? But it gets better (or, more murky anyway).
Shortly after the announcement about the OMB’s review, members of the House and Senate introduced a Bill — called the Protecting Workplace Advancement and Opportunity Act -which would invalidate the new rule. This Bill is separate from lawmakers’ ambition to nullify the regulation, which unsurprisingly many of the legislators supporting this Act also intend to support. Throw in a nice mix of election-year politics, fears about the break-up of political parties and “down-ballot” voting, and general economic insecurities, and…well, like we said, judge for yourself.
At the very least, make sure you understand what the new rule proposes to change, and take steps to chart out a course of action to implement those changes, should they occur. We can promise this: by doing just a little, you can prepare you A LOT. Please do it now — the last thing you want is to be that person who got eaten by the wolf, just because you heard the same cry over and over.
Michael W. Kulakowski, Esquire
Employment Counsel and Director, Compliance Services
MidAtlantic Employers’ Association
*This MEA Member Alert is provided for general informational purposes only and does not constitute legal advice.