New England Biz Law Update
The U.S. Department of Labor’s (DOL) Wage and Hour Division released its semi-annual regulatory agenda, indicating that it would continue to pursue major rule changes related to worker classification and overtime exemptions.
White-collar thresholds: The DOL has set an April 2024 target date to release its final rule updating salary thresholds for the white-collar overtime exemptions under the Fair Labor Standards Act (FLSA).
The proposed rule, issued in September 2023, would raise the weekly salary threshold for executive, administrative, and professional employees from $684 to $1,059 per week ($55,068 yearly), a 55% increase. The highly compensated employee annual threshold would increase by 34% to $143,988.
It is uncertain if the DOL will meet the April 2024 deadline or how closely the final rule will match the initial proposal, as the agency received more than 33,000 comments during the public feedback period. The rollout date could be as early as 60 days after publication of the final rule. However, the rule is sure to face legal challenges that could delay implementation.
Independent contractors: The DOL’s new rule standardizing the test for classifying workers as independent contractors or employees under the FLSA is also in its final stage.
The proposed rule change on classifying independent contractors received over 55,000 comments during its public comment period, which closed in December 2022. But over a year later, the Department still has not publicly addressed those comments or provided an updated timeline.
In summary, employers still face uncertainty around the timing and scope of coming changes. Businesses should use this time to get ready for the potential new rules. It’s a good idea to look now at how your pay policies might fall short under the proposed updates and have a plan to make the necessary adjustments.
