Majority of countries guarantee paid paternity leave but not the U.S. Should a workforce comprised of a single age group raise a red flag? The Hewitt court held that a well-compensated employee paid a daily rate, rather than a fixed weekly or monthly salary, was not exempt from the FLSA and its rules regarding overtime pay. There are special rules for prorating the annual compensation if employees work only part of the year, and which allow payment of a single lump-sum, make-up amount to satisfy the required annual amount at the end of the year and similar make-up payments to employees who terminate before the year ends. For non-exempt employees under FLSA, the overtime rate is at least one-and-a-half times the regular rate of pay for any hours worked above 40 in a given workweek. McCutchen alsonoted that the DOL is regularly recovering double damagesor liquidated damagesonce again, after the Trump administration limited their use to when an employer acted in bad faith or willfully. Find the latest news and members-only resources that can help employers navigate in an uncertain economy. Minimum Wages Are On the Rise in Several States. .manual-search-block #edit-actions--2 {order:2;} While the primary goal of the rule is to update the minimum salary-level requirement for white-collar exemptions, changes to the duties tests also will be considered, said McCutchen, who is astrategic advisor for New York City-based ComplianceHR. Employees. ET, Webinar See29 U. S. C. 213(a)(1). The recent announcement shouldnt come as a surprise. The Supreme Court held that when an employee is paid a given rate per day, that employee is not paid on a salary basis, and thus is The overtime threshold and certain job dutiesnot job titlesclassify individuals for exempt status. FLSA, but are still entitled to overtime under the New York State Labor Law. The early years of the Biden administration signaled a likely revisiting of overtime regulations. The .gov means its official. DOL appealed the judges decision but, the Trump administration dropped the case. The Supreme Court agreed to hear Hewitts case to determine whether the daily pay structure met the salary basis test, thus exempting Hewitt from the FLSAs requirement for overtime pay for hours worked over 40. [CDATA[/* > p:first-child.is-empty.d-none, .ms-rtestate-field > .fltter .is-empty.d-none, .ZWSC-cleaned.is-empty.d-none {display:block !important;}'; ET, Webinar Salary based compensation is only one part of the salary basis test; another part requires that employees earn above a certain amount weekly. The Trump administration's 2020 overtime rule raised the salary threshold to $35,568 per year. Please log in as a SHRM member. Licenses for Exports to Are You Ready for the UPC? Employers who pay daily rates to employees currently classified as exempt should closely evaluate their pay structures to ensure compliance with this new decision. Please let us know if you have, Cesar Okada/Getty Images Plus via Getty Images, SocialTalent Launches The SocialTalent Academy: A Professional Certification Program for Recru, Talent Attraction and Retention for 2023: Finance and HR leaders should look to on-demand pay,, TimeForge Integrates with Careerjet to Give Businesses Access to Thousands of Job Seekers, Talkspace Launches First-of-its-Kind Portal Dedicated to Employee Mental Health Resources, By signing up to receive our newsletter, you agree to our. A highly compensated employee is deemed exempt under Section 13(a)(1) if: Thus, for example, an employee may qualify as an exempt highly compensated executive if the employee customarily and regularly directs the work of two or more other employees, even though the employee does not meet all of the other requirements in the standard test for exemption as an executive. He provides Patricia is an associate in the labor and employment practice group. Learn how SHRM Certification can accelerate your career growth by earning a SHRM-CP or SHRM-SCP. Citizenship and Immigration Services (USCIS) to create a process to defer theremoval of certain noncitizens who years earlier came to the United States as children, meet other criteria and do not present other circumstances that would warrant removal, according to the DHS. In June 2021, Secretary of Labor Marty Walsh told Congressional lawmakers that the $35,568 figure was definitely too low and that DOL may indicate in a future proposal whether it believed that regular and automatic updates to the threshold would be needed. McCutchen noted that industries particularly vulnerable to DOL enforcement efforts include: The department also focuses its enforcement efforts on the amusement industry; apparel manufacturing; auto repair establishments; child care services; guard services; hair, nail and skin care services; hotels and motels; janitorial services; landscaping services; and temporary help. This rule did not include a provision to automatically raise the threshold. The DOL and NLRB notices represent the latest update in a years-long debate on both topics, and neither comes as a surprise. Plans to raise the FLSA white-collar exemption threshold have been in the works for more than a year. See other fact sheets in this series for more information on the exemptions for executive, administrative, professional, and outside sales employees, and for more information on the salary basis requirement. 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As the Supreme Court emphasized, these exemptions require an employer to satisfy three tests: (1) payment on a salary basis; (2) the salary level must meet at least a specified minimum; and (3) the employee must perform certain duties as his or her primary duties. Workers who made less than that amount would have been eligible for overtime pay. It made a 40-hour workweek the norm. This exemption likewise also requires payment on a salary basis, at least at the minimum salary level, for part of an employees compensation. On June 15, 2012, theDHS established the DACA policy. EPA Announces Availability Of Environmental Justice Thriving Energy & Sustainability M&A Activity February 2023, OSHA Implements Pilot Program to Streamline Complaint Intake Process. Last fall, the Department of Labor (DOL) published its 2021 regulatory priorities, which included plans to update the top salary level that would qualify for exemption from overtime pay (known as the white collar exemption) under the Fair Labor Standards Act (FLSA), which would result in a greater number of employees eligible for overtime pay. In an April 2021 blog post, the DOL announced that it would seek liquidated damages to settle investigations prior to litigation. To request permission for specific items, click on the reuse permissions button on the page where you find the item. She noted thatshe led the effort to revamp the duties tests in 2004. Majority of countries guarantee paid paternity leave but not the U.S. Should a workforce comprised of a single age group raise a red flag? At the end of last year, more than 100 unions and advocacy groups called on the DOL to raise the salary threshold for exempt workers to $73,551 per year and to $82,745 annually by 2026. Later that year, DOL, Its unclear just what threshold the Biden administration may propose. Id. If that amount were adjusted for inflation, it would nowbe $56,836 annually, McCutchen noted. ET, Presented by studioID and Express Employment Professionals, Remote, hybrid work linked to more anxiety, depression, Employer pay strategies increasingly prioritize transparency and equity, Payscale finds, EEOC harassment guidance could be coming in the really short term, NLRBs severance ruling has broad implications for employers, Everything employers must know on employee development, Boost Employee Engagement with Small Moments of Joy at Work, Winning the War for Talent: Why On-Demand Pay Is Becoming the Must-Have Benefit to Get and Keep the Best Employees, Gen Z workforce struggling to cope with challenges of early careers, survey finds. Friday Development: New Sanctions and Export Controls to Address Weekly IRS Roundup February 20 February 24, 2023, Everything to Know About Unbundled Legal Services. However, the district court temporarily stayed its order with respect to most individuals granted deferred action under the DACA policy on or before July 16, 2021, including with respect to their renewal requests. Webadds new state overtime pay requirements. Thus, a daily rate does not qualify. This Week in 340B: February 21 27, 2023. An agency spokesperson told HR Dive in an email Thursday that its Wage and Hour Division is still developing a proposed rule. High on the DOL's list of priorities with the proposed overtime rule will be adjusting the salary level, possibly increasing it from its current annualized rate of $35,568, noted Robert Boonin, an attorney with Dykema in Ann Arbor, Mich. "There's certainly pressure to bring the amount to as high as the $47,476 annualized amount that was enjoined by a court in 2016, but many advocates are seeking even higher levels, from $62,000 to over $80,000 per year," he said. Consider the following: The specific requirements for the computer employee exemption are summarized below. Where should L&D pros focus their attention? How Modern Manufacturing Plants Can Protect Against Ransomware, FTC Will Host May 23, 2023, Workshop on Recyclable Claims and the Appellate Court Affirmed An Order Denying A Beneficiarys Request For An Overview of Why Class Action Privacy Lawsuits May Have Just Gotten Gold Dome Report Legislative Day 26 (2023). Posted on December 16, 2021 He previously served on the firms Executive and Financial Management Committees and currently sits on the firms Compensation Committee. 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