The most comprehensive resource available for payroll professionals. This service provides payroll news, white papers, custom research answers, webinars on the hottest payroll topics, survey and research reports, in addition to access to Bloomberg BNA’s Payroll Library™.
By Howard Perlman
A group of senators and a research group in late January urged the Labor Department to more than double the weekly salary threshold for exempting employees from overtime protections of the Fair Labor Standards Act, but an increase of that magnitude would not necessarily accord with standards established by the department, a partner of a law firm said Feb. 4.
Proposed regulations regarding an update to the threshold are to be released in February, the department's Fall 2014 regulatory agenda said.
A letter to President Barack Obama that was issued Jan. 30 by 26 Democratic-caucus senators, including Sens. Dick Durbin (D-Ill.), Patty Murray (D-Wa.) and Bernie Sanders (I-Vt.), suggested that the weekly salary threshold should be raised to at least $1,090 to help employees in the middle class. The Economic Policy Institute said Jan. 28 in a news release that the threshold should be raised to about $960 to “improve the well-being of the affected employees without harm to the economy.”
However, the Labor Department's analysis of how much the threshold should be raised, which is to influence the threshold included in the proposed regulations, should focus on how the economy would be affected by an increase instead of focusing on how to help employees, which is a “wholly-illegitimate motivation” because the department does not have the power to set the threshold based on such a consideration, said John E. Thompson, a partner with Fisher & Phillips LLP, in a blog post Feb. 4.
A threshold calculated based on the factors the Labor Department applied for previous threshold calculations likely would be lower than the threshold proposed by the Democratic-caucus senators, Thompson said.
The Labor Department established the weekly salary threshold in 1975 as $155 and in 2004 as $455 because it determined that those thresholds would be sufficiently appropriate to accommodate varying prevailing wage levels across the U.S. and have sufficiently low negative effects on inflation, low-income industries and small businesses, Thompson said. Because of these factors, the department “has deliberately set the threshold near the lower end of prevailing salaries,” and establishing a higher threshold for the primary purpose of helping employees would be inconsistent with the department's previous practices for establishing the weekly salary threshold, he said.
The Democratic-caucus senators who suggested that the threshold should be raised to at least $1,090 think this would be an appropriate level because the percentage of salaried workers protected by the FLSA's overtime provisions significantly decreased since 1975 and their proposed increase would enable about half of salaried workers to be nonexempt from overtime premiums. While about 11 percent of salaried workers earn less than the current weekly threshold of $455, about 65 percent of salaried workers in 1975 earned less than the weekly threshold of $155 established that year, the senators said.
To contact the reporter on this story: Howard Perlman in Washington at email@example.com.
To contact the editor on this story: Michael Trimarchi at firstname.lastname@example.org.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)