HR Policy Association sent its comments today to the Department of Labor regarding the Wage and Hour Division’s proposed rule on Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees under the Fair Labor Standards Act (FLSA) of 1938 as published in the Federal Register on July 6, 2015.
HR Policy Association President and General Counsel Daniel V. Yager said, “The purpose of the FLSA’s executive, administrative, and professional exemptions is to recognize that certain employees have such a level of responsibility, skill, education/training, scheduling uncertainty/flexibility, and pay level, that they warrant being exempt under the basic principles of the law, yet the proposed rule would set the salary level test so high that it effectively nullifies the statutory exemption for large numbers of employees that Congress envisioned as exempt when it enacted the FLSA.  It should be recognized that many if not most employees earning below the proposed minimum salary threshold are already paid overtime because their duties fail to qualify them as an exempt executive, professional or administrative employee.  The proposal would significantly impact employers in certain industries and regions and could require employers to carefully monitor and track the time their managers spend performing concurrent nonexempt duties – thereby reducing workplace flexibility, efficiency, and customer service.”
HR Policy Association represents the most senior human resource executives in more than 360 of the largest companies in the United States.  Collectively, these companies employ more than 10 million employees in the United States, nearly nine percent of the private sector workforce, and 20 million employees worldwide.  Reform of the 1938 Fair Labor Standards Act to reflect the 21st century workplace is a long-standing goal of the Association, and most, if not all, of the HR Policy Association member companies will be directly impacted by the proposed rule.
The Association focused its comments on the following six major areas of concern:
• The proposed standard salary level test would effectively nullify the statutory exemption for a significant number of employees Congress meant to exempt.
• The proposed rule would significantly limit workplace flexibility.
• The final rule should not index the standard salary level test.
• DOL should allow nondiscretionary bonuses to count toward a portion of the standard salary level test.
• The Department should not make any changes to the duties tests without first proposing specific regulatory language.
• Proposed salary level test adequately protects executives and managers who perform nonexempt duties.
“The Department of Labor needs to carefully rethink its proposed rule and work with all stakeholders to develop a proposal that actually fulfills the President’s memorandum to “modernize and streamline the existing overtime regulations,” update the rules to “address the changing nature of the workplace,” and to “simplify the regulations to make them easier for both workers and businesses to understand and apply.  We look forward to working with the Department on productive changes,” said Mr. Yager.