In 2016, the Department of Labor proposed changes to the Fair Labor Standards Act (FLSA) specific to the issue of overtime rules. The proposed changes address the definition of a “non-exempt” employee (one who is entitled to overtime pay when working in excess of 40 hours in a week) vs. an “exempt” employee (one who is not).
As I explained at the time, the test for an “exempt” employee involves three factors, all of which must be met:
- A “duties” test, under which the employee is primarily performing executive, administrative, or professional duties as provided in the DoL’s regulations.
- A “salary basis” test, under which the employee is paid a predetermined and fixed salary which is not hourly in nature and which is not subject to reduction because of variations in the quality or quantity of work performed.
- A “salary level” test, under which the employee is paid more than a government-specified weekly or annual threshold amount.
The 2016 proposal affected only the 3rd part, the “salary level test.” While there were several changes, the major concern for AAN members was a proposed increase in the minimum threshold salary from $455 per week/$23,660 per year to $970 per week/$50,440 per year. The Department of Labor eventually adopted rules that set the minimum salary at $913 per week or $47,476, with automatic readjustment every three years.
It was estimated that approximately 4.1 million employees would have switched from “exempt” to “non-exempt” as a result of the new threshold salary. For AAN members, the concern was that the bulk of reporting staff would have made this conversion, putting editors and publishers in the untenable position of having to restrict employee hours to 40 per week or pay overtime in order to get the paper out each week. That’s why our membership breathed a sigh of relief when a United States District Court stayed the effectiveness of the rule and then the new Administration repealed it altogether.
Well, now it’s back – in a slightly softened form. As I explain in a post on my firm’s CommLawBlog, the Department of Labor has proposed a similar set of changes, the most important of which is an increase in the minimum threshold salary to $679 per week/$35,308 per year. The impact will be smaller, as only 1.3 million employees are expected to change status, but the effect is still likely to be felt within the alt-weekly community. The Department of Labor will soon open a comment period that will last for 60 days, but it is widely expected that the proposal will be enacted and become effective some time in early 2020, meaning it may be time to dust off those plans you began to make regarding your staff status back in 2016 and get ahead of this issue.