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DOL/WHD | RIN: 1235-AA39 | Publication ID: Fall 2024 |
Title: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees | |
Abstract:
The Department of Labor (Department) proposed to update and revise the regulations issued under the Fair Labor Standards Act implementing the exemptions from minimum wage and overtime pay requirements for executive, administrative, professional, outside sales, and computer employees. Several sections of the proposal were addressed in a final rule published by the Department on April 26, 2024, that updated the standard salary level and the total annual compensation level required for the exemption of highly compensated employees, and added to the regulations an updating mechanism to allow for the timely and efficient updating of all the earnings thresholds. The Department also proposed in sections IV.B.1 and B.2 of the NPRM to apply the updated standard salary level to the four U.S. territories that are subject to the federal minimum wage (Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands) and to update the special salary levels for American Samoa and the motion picture industry in relation to the new standard salary level. The Department will address these aspects of its proposal in a future final rule. |
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Agency: Department of Labor(DOL) | Priority: Section 3(f)(1) Significant |
RIN Status: Previously published in the Unified Agenda | Agenda Stage of Rulemaking: Final Rule Stage |
Major: Yes | Unfunded Mandates: Private Sector |
CFR Citation: 29 CFR 541 | |
Legal Authority: 29 U.S.C. 201 et seq. 29 U.S.C. 213 |
Legal Deadline:
None |
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Statement of Need: The primary goals of this rulemaking are to address the standard salary level to the four U.S. territories that are subject to the federal minimum wage (Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands), and to update the special salary levels for American Samoa and the motion picture industry in relation to the new standard salary level in the 2024 final rule. The salary levels applied to employees in the five U.S. territories have not changed since 2004. |
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Summary of the Legal Basis: Section 13(a)(1) of the FLSA, codified at 29 U.S.C. 213(a)(1), exempts any employee employed in a bona fide executive, administrative, or professional capacity or in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary, subject to the provisions of the [Administrative Procedure Act.]) The FLSA does not define the terms executive, administrative, professional, or outside salesman. However, Congress explicitly delegated to the Secretary of Labor the power to define and delimit the specific terms of the exemptions through regulations. Accordingly, the Department issues regulations at 29 CFR part 541 defining the scope of the section 13(a)(1) exemptions. |
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Alternatives: The Department proposed to apply the updated standard salary level to the four U.S. territories that are subject to the federal minimum wage (Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands) and to update the special salary levels for American Samoa and the motion picture industry in relation to the new standard salary level. The Department considered a range of alternatives before selecting its methods for updating the standard salary level. |
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Anticipated Costs and Benefits: In the NPRM, the Department conducted an analysis of the impact of the proposed salary level changes on the territories, applying reasonable assumptions to the available data to estimate the number of affected workers in the territories. The Department requested comments on its methodology for estimating the impact of the proposed rule on the territories, as well as on additional sources of data. The Department will estimate anticipated costs and benefits related to the special salary levels in the U.S. territories and the motion picture industry in a future final rule.
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Risks: This action does not affect public health, safety, or the environment. |
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Timetable:
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Regulatory Flexibility Analysis Required: YES | Government Levels Affected: Federal, Local, State, Tribal |
Small Entities Affected: Businesses, Governmental Jurisdictions, Organizations | Federalism: No |
Included in the Regulatory Plan: Yes | |
RIN Data Printed in the FR: Yes | |
Agency Contact: Daniel Navarrete Director of the Division of Regulations, Legislation, and Interpretation Department of Labor Wage and Hour Division 200 Constitution Avenue NW, FP Building, Room S-3502, Washington, DC 20210 Phone:202 693-0406 |