Compliance Stuff

On those (hopefully) rare occasions when a supervisor or other exempt employee must be suspended without pay for disciplinary reasons, employers should take special care to ensure that the unpaid suspension does not result in loss of the employee’s exempt status. Loss of exempt status could be costly to an employer, who may then be required to pay overtime to an employee who is typically not entitled to overtime wages. Generally, exempt employees must be paid on a “salary basis,” meaning they are regularly paid a predetermined amount that cannot be reduced because of the quality or quantity of the employee’s work . However, the Fair Labor Standards Act (FLSA) allows employers to deduct pay of exempt employees in limited circumstances, including for unpaid disciplinary suspensions . Employers can impose an unpaid disciplinary suspension without risking loss of an employee’s exempt status only if the following criteria are met: The suspension is for one or more  full days ; The suspe...

With the U.S. Department of Labor’s recent increases to the minimum salary or fee amount for certain exempt employees , many employers are reviewing the exemption status of their employees. In doing so, employers should be mindful of varying state law requirements, which may be higher than even the newly increased federal thresholds. Increased salary thresholds for white-collar exemptions under FLSA In April 2024, the DOL issued final regulations raising the white-collar exemption salary threshold under the Fair Labor Standards Act (FLSA). The first increase under this rule went into effect on July 1, 2024, increasing the minimum salary for the executive, administrative, and professional exemptions to $844 per week (approximately $43,888 per year). Another increase is planned for January 1, 2025—further raising the threshold to $1,128 per week (approximately $58,656 per year)—and automatic increases will commence on July 1, 2027, and every three years thereafter. While some court chall...

  A Fifth Circuit panel heard oral argument on Wednesday, August 7, on whether Department of Labor (DOL) regulations imposing a salary requirement to satisfy the executive, administrative and professional exemptions is valid. The case on appeal,  Mayfield v U.S. Department of Labor , does not address the minimum salary level increase that took effect July 1, 2024 . Rather, the appeals court is considering an ongoing challenge to the DOL’s  previous  regulation implemented during the Trump administration that increased the salary level to $35,568 . The lawsuit challenges the DOL’s authority to require  any  salary level. The plaintiff argues the statute, the Fair Labor Standards Act (FLSA), does not impose a salary requirement for the executive, administrative, and professional (EAP) exemptions, and that the DOL regulation imposing such a requirement is inconsistent with the statute . A federal district court in Texas previously upheld the Trump DOL rule. (S...