Federal Updates | New Proposed Federal Labor Rules

The following updates are provided in cooperation with our national allies at NAM.

Proposed Rule: Regular Rate Under the FLSA.  On March 29, DOL published a proposed rule on the regular rate under the Fair Labor Standards Act. This proposed rule would make clear what employers must include in the calculations of a nonexempt employee’s “pay” for purposes of time and one-half for hours worked beyond the 40-hour workweek. The proposed regulation would exclude creative employee benefits (e.g., wellness programs, on-site health clinics, retirement, gym memberships, etc.) from the base pay calculation. The comment period closes May 28, 2019.

Proposed Rule: Joint Employer Under the FLSA.  On April 1, DOL released its proposed joint employer rule to revise and clarify the responsibilities of employers and joint employers to employees under the Fair Labor Standards Act. DOL proposes a four-factor test that would consider whether the employers actually exercise the power to (1) hire or fire the employee, (2) supervise and control the employee’s work schedules or conditions of employment, (3) determine the employee’s rate and method of payment, and (4) maintain the employee’s employment records. The proposal will likely be published for comment next week, with a 60-day comment period. For more information, click here.

Proposed Rule: Overtime Under the FLSA.  The Department of Labor has published its proposed overtime rule. The proposal would increase the minimum salary for overtime exemption to $35,308 per year. It does not include an automatic increase, but DOL commits to a periodic review and update of the threshold. It also permits employers to use nondiscretionary bonuses and incentive pay to satisfy up to 10% of the salary level. There is no change to the duties test. The rule affects exemptions for executive, administrative, professional, outside sales and computer employees — it does not affect non-management employees, including non-management production-line employees. The rule also contains a new proposed threshold for highly compensated employees — $147,414. The comment period closes May 21, 2019. For more information, click here.