by Jackson Lewis
On March 31, 2003, the U.S. Department of Labor, Wage and Hour Division issued
a proposal to update its regulations defining the overtime and minimum wage exemptions
under the Fair Labor Standards Act for executive, administrative, professional, outside
sales and computer related employees. The revised regulations would significantly
impact employers by altering the requirements for the so-called "white collar"
and outside sales exemptions.
The revisions as proposed are expansive and are intended to reflect the workplace
of the 21st Century. If adopted, it will be the first time in more than 50 years
that the duties tests for the executive, administrative, professional and outside
sales employees have been significantly altered.
The DOL has encouraged the public to submit written comments on the proposed regulations
during the 90-day comment period which ends on June 30, 2003. Specifically, the DOL
is seeking information from the public about occupations that have been the subject
of confusion and litigation regarding their exempt status, including:
- pilots
- athletic trainers
- funeral directors
- insurance salespersons
- loan officers
- stock brokers
- hotel sales and catering managers
- dietary managers in nursing homes
DOL is particularly interested in information from employers about job duties
and responsibilities performed by employees in these positions and whether such occupations
should be treated as exempt.
Other specified areas of inquiry include:
- Whether the salary level and/or salary basis requirements should be eliminated
as unnecessary for sole charge executives and business owners.
- The list of type of work that constitutes office or non-manual work related to
the management or general business operations.
- The list of activities in § 541.204 that are considered to be of "substantial
importance" in terms of additions or deletions to the list.
- Whether the "discretion and independent judgment" requirement should
be deleted entirely, retained as a third alternative for meeting the "position
of responsibility" requirement, or retained but modified to provide better guidance.
- Whether the requirements for professional exemption should include a specific
formula for determining the equivalent of intellectual instruction and work experience.
- Whether the special salary levels should be maintained for American Samoa.
- The proposed salary levels and any alternative salary level amounts or methodologies
for determining appropriate salary levels.
- Whether the regulations should include a "salary only" test for highly
compensated employers, where employees performing non-manual or office work and earning
a specific amount automatically would be exempt without regard to the employee's
duties.
- Alternative strategies for removing the "salary tests" from the regulations
and replacing them with tests that rely solely on employees' duties.
The AFL-CIO has established a webpage which allows employees to submit electronically
and instantaneously a form letter to the Department of Labor and President Bush generally
opposing the Department of Labor's efforts to update the regulations. This "click
here" campaign reportedly has resulted in the lodging of thousands of comments
reflecting the employee/union viewpoint. As this is to some extent a "numbers
game," it behooves employers and associations representing them to voice their
responses to the proposed regulations and to submit comments, which will be added
to the count.
The comment period provides employers with the first meaningful opportunity to react
officially to the proposed regulations and potentially expand and clarify the types
of positions that will be considered as exempt.