Department of Labor Proposes Changes to Definition of "White Collar Employee" for FLSA Purposes

MRSC
May 14, 2003

The U.S. Department of Labor has proposed changes to its regulations defining exemptions from the Fair Labor Standards Act (FLSA) for "white-collar" employees. These changes, if adopted, would increase the minimum salary at which a worker would qualify as a "white collar" employee, from $155 to $425 a week. The proposed rule retains the department's current "short test" reliance on an employee’s primary duty and eliminates the "long test" rule restricting exempt employees from devoting more than 20 percent of time in a workweek performing non-exempt duties.

The proposed executive duties test has three requirements: managing the enterprise; directing the work of two or more employees; and having authority to hire or fire (or such recommendations are given particular weight). Under the administrative duties test the "discretion and independent judgment" element would be replaced by a new test that employees must hold a "position of responsibility." As to "professional duties," the proposed regulations recognize as exempt "learned professionals," certain employees who gain equivalent knowledge and skills through a combination of job experience, military training, attending a technical school or attending community college. View a comparison of the current rules with those being proposed.

The department also proposes to allow deductions from the salary of exempt employees for full-day absences taken for disciplinary reasons, but it retains the "salary basis" rule prohibiting deductions from exempt salary for partial-day absences.

Written comments on the proposed rules should be submitted by June 30, 2003.