The DOL is not proposing any changes to the “duties test” at this time. This is a more complex part of the exempt/nonexempt decision, which helps separate supervisors, generally exempt, from nonsupervisors that are nonexempt.
A proposal to raise the threshold even further, put forth in the latter days of the Obama administration, was struck down by the courts. The current proposal is more modest. In a recent news release, the Society for Human Resource Management (SHRM) stated that the “new proposal doesn’t include automatic adjustments to the exempt salary threshold.” It further stated, “The DOL intends to propose salary-threshold updates every four years. This would provide clarity and help workers and employers by having a regular and orderly process for future changes.”
What should a company do today? It is too early to assume that the proposal will pass. SHRM notes that it could be a lengthy process before the rule is finalized. Other experts state legal and legislative battles could delay any implementation until the next election, when a Democrat may end up in the White House. With a Democrat in the White House, it may mean another attempt at a higher threshold.
For now, some housekeeping may be in order. Companies may want to review their workforces to make sure they are fully compliant under current rules. For the administrative exemption, “employees’ primary duty must be to perform office or nonmanual work directly related to the management or general business operations of the employer or the employer’s customers, and must include the exercise of discretion and independent judgment with respect to matters of significance,” according to SHRM.
Look for updates about significant changes during this process on our website or social media.