You may already know that the Fair Labor Standards Act (“FLSA”) requires a minimum wage and overtime. But did you know that there’s a minimum salary threshold for most salaried employees? Just when some employers are learning that there’s a minimum wage for salaried employees, the Department of Labor (“DOL”) is proposing to increase this salary threshold by almost double. For schools, this change will be impactful to school support staff. While you’re planning for the salary threshold increase, make sure to also begin using the DOL’s newly released FMLA forms.
The Proposed Regulations
The Fair Labor Standards Act (“FLSA”) guarantees a minimum wage and overtime pay. While these protections apply to most employees, the FLSA provides a number of exemptions. The DOL, the agency that enforces federal minimum wage laws, proposed to update and revise the regulations issued under the FLSA that implement the exemption from minimum wage. Generally speaking, to be exempt from minimum wage, employees must meet both criteria of a two-part test: Earn a salary of at least $455 weekly and perform job duties that require the exercise of independent discretion. The DOL has updated its salary level threshold 7 times since 1938, most recently in 2004.
With the tired department store manager in mind, the DOL proposed to increase the minimum salary threshold for exempt workers to a salary level equal to the 40th percentile of full-time salaried workers, an amount estimated to be about $921 weekly or $47,892 annually. Linked to the salaries of all workers, including employees in the public and private sectors, the salary level is proposed to update automatically. The DOL is considering permitting nondiscretionary bonuses to count toward 10% of the salary threshold.
While there remains no salary threshold for teachers or academic administrators (i.e., principals, vice-principals, academic department heads, etc.), support employees, including paraprofessionals, custodians, secretaries, IT and many other school employees will be affected by the new rules.
While the regulation is still in draft form, all employers, schools included, are best advised to take inventory of employees’ statuses and determine whether there are employees currently classified as exempt who would not earn enough, according to the proposed regulation’s threshold, to maintain their exempt statuses. If there are any employees in the position of a potential reclassification, the next step would be to assess whether it is more cost and time efficient to give employees raises or reclassifications.
Potentially, employee classifications have far-reaching legal and financial consequences. To anticipate the DOL’s proposed rule becoming final, the best approach is to work proactively with your solicitor to evaluate the sustainability of employee classifications prior to reclassifications.
New FMLA Forms
The DOL released updated Family Medical Leave Act (“FMLA”) forms. There is no substantive change to the forms, aside from specific references to the confidentiality requirements of Genetic Information Nondiscrimination Act (“GINA”), which limits the collection of data on hereditary health conditions.
Even in the absence of any real substantive changes, schools are best advised to immediately begin using the new forms. Following recent Third Circuit case law, the procedural requirements of the FMLA, including the requirement to distribute DOL forms, could be grounds for a claim of FMLA interference. The updated forms are available to be downloaded from the DOL’s website.
- Take this opportunity, before the start of the new school year, to identify which employees will be affected by the new rules.
- Begin using the DOL’s updated FMLA forms.
If you should have any questions, contact your legal counsel or one of the attorneys at KingSpry.
School Law Bullets are a publication of the school law attorneys of KingSpry’s Education Law Practice Group. John E. Freund, III, is our editor. The article is meant to be informational and does not constitute legal advice.