Tag: NOPR

DOL’s Long-Awaited Overtime Proposed Rule Announced

Recent developments on the wage and hour front will soon require employers to reexamine exemption classifications within their workforce.

On March 7, 2019, the U.S. Department of Labor (“DOL”) released its long-awaited proposed amended rule to the overtime provisions of the Fair Labor Standards Act (“FLSA”). If this proposed rule takes effect, the minimum salary threshold required for workers to qualify for the FLSA’s “white collar” exemptions (executive, administrative and professional) will be increased to $35,308 annually (or $679 per week). The current salary threshold under the FLSA’s “white collar” exemptions is $455 per week ($23,660 annually), and has not seen an increase since 2004.

The proposed rule also will increase the salary threshold for the “highly compensated employee” exemption, from the current $100,000 to $147,414 per year. Further, under the proposed rule, employers will be allowed to count certain nondiscretionary bonuses and incentive payments (including commissions) toward up to 10 percent of the new salary threshold.

By way of background, in May 2016, the DOL under President Obama issued a rule intended to increase the salary threshold to $913 per week ($47,476 annually). Other changes to the rule included an increased salary threshold for highly compensated workers from $100,000 to approximately $134,000 and a schedule for automatic increases to the salary threshold.

Days before the rule was set to take effect, a Texas federal district court preliminarily enjoined the rule, and later confirmed its ruling on the basis that the new regulations placed too much emphasis on the salary requirement and would have resulted in the reclassification of substantial groups of employees who otherwise performed duties qualifying for exempt status. At the time, the DOL predicted that its rule would cover about four million workers who were presently non-exempt.

While the DOL’s newly proposed rule is set to take effect in January 2020, it is subject to a 60-day comment period and may face legal challenges from business and worker advocate groups alike. Given that some increase to the salary threshold is imminent, employers should nevertheless remain proactive and audit their exempt worker population. As we have noted in prior publications, employers have a number of options available in addressing this issue. As a first step, employers should identify all positions in their organizations that are classified as exempt but pay less than $35,308, review employees’ job descriptions for compliance under each exemption’s duties test, and determine the number of hours exempt employees are working.

 

© 2019 Vedder Price.
This post was written by Sadina Montani and Monique E. Chase of Vedder Price.
Read more labor and employment news, including updates on the DOL’s Overtime Rule, on our labor and employment page.

New Mexico Issues a Notice of Proposed Rulemaking to Revise its State Rural Universal Service Fund

Lewis Roca Rothgerber

This past Wednesday, the New Mexico Public Regulation Commission (NMPRC)approved a Notice of Proposed Rulemaking (NOPR) to revise New Mexico’s State Rural Universal Service Fund following numerous workshops and filings by NMPRC staff, the New Mexico Attorney General’s Office, and both wireline and wireless industry participants in Case No. 12-00380-UT. The NOPR will revise 17.11.10 New Mexico Administrative Code (NMAC). The NOPR will be published for comment, with the goal of providing a final rule by October 1, 2014 that will limit the growth of the  State Rural Universal Service Fund (SRUSF), expand telecommunication service to unserved and underserved areas of the state, earmark a portion of the fund for the build out of broadband service, and ensure better accountability for the use of state funds under the program.

The proposed rule was approved 5-0, with two amendments, by the Commission. The NOPR is expected to be filed in Case No. 12-00380-UT on Monday, July 28, 2014. Let’s briefly summarize several key provisions of the proposed NOPR, subject to comments being filed and final approval by the Commission.

First, because many wireline companies have not increased their residential rates in a rate proceeding before the Commission for over 15 years, the benchmark rate for residential customers will increase to $18.09. A company that chooses  not to raise its benchmark would have the difference subtracted from what it would normally receive from the SRUSF.  Second, business rates will be adjusted over a three year period. Third, the formula for reimbursement from the fund will be adjusted to use 2012 voice minutes. Minutes have decreased since the SRUSF statute and rules were established. The decrease has occurred because more people are using wireless phones and other services. This will result in a reduction in payouts from the fund, which is funded by all telephone customers (both wireline and wireless). The end result will be a reduction of about $9 million annually from the current $24 million fund. Because of the size of impact on the payments to the rural local exchange carriers, this would be phased in over several years. Fourth, from the $9 million savings in annual payments, $5 million will be set aside to fund the build out of broadband capable infrastructure as part of the SRUSF. This $5 million broadband fund will be available to both wireline and wireless providers on a project-by-project basis.”. The $5 million must be used for infrastructure, and companies will be required to fund 25 percent of each approved project. 50 percent of the SRUSF project money would be awarded upfront, and the remaining would be provided after progress reports are filed and reviewed by the Commission. Lastly, if a company can demonstrate need, they may come before the Commission for additional funding.

Two additional changes to the proposed NOPR were made by the Commission at the Open Meeting on July 23. First, the Commission approved an annual cap of a 3 percent surcharge on customers phone bills to fund the SRUSF. If expenditures exceed the 3 percent, then the amount of money from the fund will be prorated among recipients. SOLIX, a private company under contract with the Commission, manages the fund for New Mexico. Second, companies will be required to provide detailed information on how they have spent both federal and state universal service funds since the initial rule became effective in 2006. The official comment period and other due dates will be published in an order on Monday, with the goal to have the docket closed by October 15, 2014.