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Department of Labor Wage and Hour Division Sets Forth 2018 Regulatory Agenda

Labor & Employment Regulatory Newsletter By: Otto Immel

ISSUE: As part of the Trump Administration’s Spring 2018 unified regulatory agenda, the Wage and Hour Division of the Department of Labor ("DOL") unveiled its regulatory priorities for the balance of the year. Here are a few of the most notable initiatives from the Wage and Hour Division affecting employers:

Revisiting the Salary Basis for the White Collar Exemptions

As previously reported, last year the Department of Labor published a Request for Information relating to the Obama-era overtime rule that would have significantly increased the minimum salary threshold for exempt employees from $455 per week to $913 per week (or $23,660 to $47,476 per year).

The DOL has announced that it intends to issue a Notice of Proposed Rulemaking in January 2019 to determine what the salary level should be for the “white collar” exemptions (covering executive, administrative, and professional employees). Secretary Acosta has indicated that the salary threshold test will be raised to about $33,000 per year and may also contain an automatic annual increase of the salary threshold for white collar exemptions.

Tip Pooling Regulations

The FLSA provides in part that an employer may take a partial tip credit against its minimum wage payment obligation to a tipped employee based on tips received and retained by the employee. Congress recently amended the text of the FLSA with respect to tips such that an employer “may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.” This amendment also expressly rescinds DOL regulations prohibiting employers from requiring tipped employees to share their tips with traditionally “non-tipped” employees. As a result, tipped and non-tipped employees may now share tips, as long as the employer does not take a tip credit.

The DOL intends to issue a Notice of Proposed Rulemaking to align its regulations with this recent statutory amendment in August 2018.

Regular Rate Under the Fair Labor Standards Act

Another notable item on the unified agenda is the DOL’s intent to issue a Notice of Proposed Rulemaking to “clarify, update, and define” the regular rate of pay, which is used to identify which payments qualify as the compensation to an employee for purposes of determining overtime pay. An employee’s regular rate customarily includes an employee’s hourly rate of pay, but may also include other types of compensation, such as commissions or bonuses, although it is not always clear which types of compensation must be included when calculating the regular rate and how it should be calculated. The DOL intends to issue a Notice of Proposed Rulemaking to provide much needed clarity to this calculation in September 2018.

Read more Insight & Impact from June 2018:

IMPACT: Employers will want to stay tuned as the DOL continues to make progress on these and other regulatory priorities this year.

For more information, please contact your local Quarles & Brady attorney or this member of our employee benefits group:

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