OPM has proposed a change to the Fair Labor Standards Act (FLSA) that would revise the regulations that apply to federal employers and employees. If made effective, this proposed rule will bring OPM’s regulations into alignment with those issued by the U.S. Department of Labor.
Understanding the FLSA Exemptions
The FLSA covers all employees, however, gives exemptions to those in positions that meet certain criteria. The three primary exemption categories that exist in the Federal workplace are,
- Executives (supervisors and managers).
- Administrative employees (HR, budget, and similar occupations).
- Professional employees (physicians, librarians, and engineers).
Proposed Changes to Salary Thresholds
“One of the criteria required to qualify as an exempt employee is that the employee is paid at a certain salary level”. In May 2016, the Department of Labor raised that salary level to $47,476 per year for non-federal employees. The proposed rule from OPM would raise the current amount from $23,600 to the $47,476 level of non-feds.
Provisional Adjustments and Their Impact
Along with this proposal, there are two other provisions. First, the three exemptions to the requirement of employees paid above a certain salary to be exempt would continue. The exceptions to this rule would apply to those who; perform different work duties for a temporary period; perform work in a foreign location for more than a week, or are engaged in the practice of law or medicine. Lastly, the second provision is a new one and like the DOL regulations provide for adjustments to the minimum salary level beginning January 2020 and continuing every three years after. This would allow for the minimum salary level to remain in “…the 40th percentile of weekly earnings of full-time non-hourly workers in the lowest-wage Census region in the 2nd quarter of the year preceding the update…”
Implications for Federal Employers
What does this mean for Federal employers? The impact should be relatively small compared to that of non-federal employers. December 1, 2016 is the target date of implementation. Generally speaking, most public-sector employers have been working to comply with this proposed rule. However, there have been a couple of lawsuits filed to prevent the implementation of the new salary. This new minimum salary level proposal tends to fall in the GS-7 salary range. The three exemption categories listed above tend to fall in GS-9 or higher range. Therefore, if an employee fully meets the requirements for exemption in one of those three categories, there should be little impact of this change. The change may have more impact on those paid under WS, WD, or WN pay scales. These rates represent Wage Supervisors and Production Facilitating jobs.
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