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Labor & Employment Blog

Labor & Employment Blawg

The Labor & Employment Blog provides employers with breaking news, insights, and legal analysis on the wide range of labor and employment issues facing employers and businesses.  While the Blog provides a general summary of regulation updates, it is not intended to be, and should not be relied upon as, legal advice.  The labor & employment attorneys at Chamberlain Hrdlicka stand ready to counsel employers on the issues they face.

Larry Carbo, Shareholder and Co-Chair

Diana Perez Gomez, Shareholder and Co-Chair

Julie Offerman, Shareholder

Kellen Scott, Shareholder

Leslie Tan, Senior Counsel

Elizabeth Feeney, Associate

AmyJo "AJ" Foreman, Associate

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DOL Announces Proposed Rule That Could Affect Millions of Currently-Exempt Employees

Last week, the Department of Labor (DOL) released a proposed rule that, if adopted, will raise the salary requirements for certain exempt employees. The DOL estimates its new rule could extend overtime protections to more than three million workers.

Most employers already know the Fair Labor Standards Act (FLSA) requires covered employers to pay most employees an overtime premium for all hours worked over forty in a workweek. This general rule, however, does not apply to employees in a bona fide executive, administrative, or professional capacity, as long as the employee earns a fixed salary of at least $35,568 per year. If published today, the proposed rule would raise the salary threshold to $1,059 per week, or $55,068 annually. However, the proposed rule makes clear that the DOL intends to use the most recent data available at the time the rule is published, which will change these dollar figures. The amounts are tied to the 35th percentile of weekly earnings for full-time salaried workers in the lowest-wage Census Region. And the DOL projects the annual salary threshold could rise to $59,285 by the fourth quarter of 2023 and $60,209 by the first quarter of 2024. Regardless of the applicable threshold, the proposed rule is designed to allow millions of workers to qualify for overtime protections under the FLSA.

The proposed rule would also raise the salary requirement for exempt highly-compensated employees. Under the proposed rule, highly-compensated employees must earn at least $143,988 in total annual compensation to remain exempt from federal overtime requirements, a significant increase from the current annual threshold of $107,432. Further, the DOL proposes to establish a mechanism for automatic updates every three years for these salary thresholds. While many employers may wonder how this new rule will affect their workforce, the rule is not currently binding on employers. There will be a sixty-day public comment period. Thereafter, if the DOL publishes a final rule, employers will have an additional sixty days before the rule goes into effect. And, as with a similar but unsuccessful effort by the DOL in 2016, the final rule likely will face judicial challenges.

The proposed rule also includes increased salary requirements, not discussed in this Client Alert, for computer employees, outside sales employees, academic administrative employees, and employees in the motion picture production industry. If you have questions about what this proposed rule could mean for you or your business, contact us.

  • AmyJo "AJ"  Foreman
    Associate

    AmyJo "AJ" Foreman is an associate in the litigation section. Her practice focuses primarily on commercial litigation, labor & employment, and appellate matters.

    AJ graduated from the University of Houston Law Center where she was ...

  • Brittney  Williams
    Senior Associate

    Brittney Williams is a senior litigation associate whose practice primarily focuses on complex labor and employment, and commercial litigation. She provides a full range of labor and employment law services to her clients ...

  • C. Larry  Carbo, III
    Shareholder

    Larry Carbo maintains a commercial litigation practice focusing on representation of companies in employment matters including misappropriation of trade secrets, enforcement and defense of non-competition agreements and ...

  • Diana Pérez Gomez
    Shareholder

    Diana Gomez is a talented trial attorney with extensive experience in civil lawsuits in state and federal courts. She focuses on complex labor and employment disputes by providing a full range of employment law services to her ...

  • Elizabeth A. Feeney
    Associate

    Elizabeth "Liz" Feeney is an associate in the Commercial Litigation section, focusing primarily on labor and employment matters. She graduated from the SMU Dedman School of Law and began her career at a mid-sized firm in Fort Worth ...

  • Hannah  Strawser
    Associate

    Hannah Strawser is an associate in the Houston office and a member of the Firm's Commercial Litigation section, focusing primarily on labor and employment matters. Hannah graduated from the University of Houston Law Center and ...

  • Julie R. Offerman
    Shareholder

    Julie is an experienced litigation attorney in Chamberlain’s Houston office. She has substantial experience defending employers nationwide in wage and hour class and collective action lawsuits, including matters involving ...

  • Kellen R. Scott
    Shareholder

    Mr. Scott maintains a general civil litigation practice in state and federal courts, with particular emphasis on employment law, governmental defense, and civil rights.

    His practice includes the defense of employers and ...

  • Leslie T. Tan
    Senior Counsel

    Leslie Tan is an experienced attorney specializing in labor and employment matters and complex civil litigation. Ms. Tan enjoys guiding employers through challenging situations, from counseling on daily operations to ...

  • Lucas  Meng
    Associate

    Lucas Meng joined Chamberlain Hrdlicka’s Commercial Litigation practice, specializing in labor and employment. He is an active litigator in federal and state court, where he defends clients in a wide variety of employment law ...