On May 21, IAAPA as part of the Partnership to Protect Workplace Opportunity (PPWO), a coalition that consists of a diverse group of associations, businesses and other stakeholders representing employers with millions of employees across the country, submitted comments to the Department of Labor’s (DOL) proposed rulemaking on Fair Labor Standards Act (FLSA) overtime regulations.

The proposed regulation includes many of the recommendations that PPWO offered during the Request for Information and the 2014 Obama Administration rulemaking. Key provisions of the proposed regulation include:

Salary Threshold – Raises the threshold to $35,308/year ($679/week) by reverting to the methodology used in the 2004 rule that focused on the 20th percentile of full-time wage earners in the lowest income region of the company (identified as the South) as well as the retail industry.

Future Salary Updates – Does not implement automatic updates, but the proposal seeks comment on conducting regularly scheduled rulemakings to update the salary threshold consistent with the methodology used in this proposal.

Duties Test – Makes no changes to the duties tests. 

Highly Compensated Employees – Increases the total annual compensation requirement for “highly compensated employees” (HCE) from the currently-enforced level of $100,000 to $147,414 per year which is higher than the Obama DOL regulation’s threshold of $134,004. The DOL maintained the methodology used by the Obama Administration for this salary level which resulted in the higher threshold.

Salary Test – Would allow nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary test requirement.

In summary, the PPWO supports the Department’s proposal to rescind the 2016 Final Rule and revert to the 2004 methodology in setting the salary threshold for determining exempt status, yielding a standard salary threshold of $35,308/year or $679/week.

The PPWO requests that the Department uncap the percentage of salary threshold that can be satisfied by commissions and nondiscretionary bonuses and that the Department harmonize the types of compensation that can be considered to satisfy the salary thresholds with the regular rate regulations.

The PPWO further requests that the Department not increase the HCE threshold.

Finally, the PPWO requests that the Department provide a minimum of 180 days to implement any changes.

To read the submitted comments, please click here.