Deborah K. Foster, PhD

The Department of Labor’s (DOL’s) September 8, 2023 Notice of Proposed Rule Making (NPRM) increases the standard salary level for the white-collar exemption to the 35th percentile of the pay distribution of full-time, non-hourly workers in the South Census region and imposes automatic updates to the salary threshold every three years.  The automatic adjustments would use the most recent quarterly data from the Current Population Survey to determine the 35th percentile of the pay distribution for full-time non-hourly workers in the South Census region. 

The Department of Labor’s September 8, 2023 Notice of Proposed Rule Making (NPRM) increases the salary threshold for the white-collar FLSA exemption.  In the NPRM, the Department explains that the purpose of the salary level test is to serve as an initial screening tool.[1]  It then goes on to downplay the extent to which the new threshold will increase the fraction of white-collar workers who will fail the salary level test by stating “the number of salaried white-collar employes for whom salary would be determinative of their non-exempt status and who earn at least the long test salary level – 3.2 million – is nearly ten times smaller than the number of salaried white-collar workers for whom job duties would continue to be determinative of their exemption status…”[2] 

Since the California Supreme Court issued its ruling in the Ferra v. Loews Hollywood Hotel, LCC matter, many articles have alerted California employers that the meal and rest premium payments for non-compliant meal and rest periods must be paid at the regular rate instead of the employee’s base hourly rate. 

Headlines announcing impending layoffs and furloughs abound as the economy declines due to the spread of the COVID-19 virus and a downturn in the oil and gas sector. Depending on the demographics of their employees, some firms may be particularly susceptible to risk of adverse impact in layoff and furlough decisions.

Edgeworth Partners Dr. Stephen Bronars and Dr. Deborah Foster discuss the Department of Labor's recent proposal to increase the HCE salary threshold from $100,000 to $147,414. 

In anticipation of future civil class actions related to no-poach and wage-fixing agreements, Edgeworth Partners Dr. Stephen Bronars and Dr. Deborah Foster have published a two-part primer in Law360 on wage analyses that are frequently used in employment discrimination cases and will become increasingly relevant as labor issues cross over into the antitrust arena.

In anticipation of future civil class actions related to no-poach and wage-fixing agreements, Edgeworth Partners Dr. Stephen Bronars and Dr. Deborah Foster have published a two-part primer in Law360 on wage analyses that are frequently used in employment discrimination cases and will become increasingly relevant as labor issues cross over into the antitrust arena.

The DOL's estimate of an additional 2.5 percent increase in the new salary threshold over three adjustments may not be accurate and likely understates its magnitude.

Mr. Michael Kheyfets, Dr. Deborah Foster and Dr. Nathan Woods discuss the 10 questions you should ask your experts who are working with your sensitive data. 

Drs. Bronars, Foster, and Woods discuss the Department of Labor’s (DOL) proposed salary test for the white collar exemption to the Fair Labor Standards Act (FLSA).

Drs. Deborah K. Foster, Stephen G. Bronars, and Nathan D. Woods published the article “Approaches to Hourly Rates Under DOL White Collar Rules” in Law360.

The NPRM claims the new salary threshold for the EAP exemption “will, in combination with the standard duties test, better define and delimit which employees are employed in a bona fide EAP capacity in a one-test system.”  However, the new salary threshold is set at the 35th percentile of the non-hourly pay distribution in the South region, which is $1,059 per week.  The non-hourly pay distribution includes many blue-collar workers and white-collar workers explicitly excluded from the FLSA (such as teachers), raising doubts as to whether an arbitrary threshold from this distribution has any ability to determine which EAP employees are bona fide.

The Department of Labor’s (DOL’s) NPRM provides estimates of the number of employees affected by the proposed salary test level increases, but projections are only as good as the data on which they are based.  In fact, there is no data currently collected that would enable an accurate and reliable estimate of the number of employees who are subject to the FLSA or how many employees are classified as exempt, much less an estimate of those that would be impacted by the proposed changes. 

The NPRM touts that an estimated 3.4 million employees will “gain overtime protection” under the proposed regulations.  As described in our post on October 25, it is unlikely that the new rule will increase compensation of the re-classified employees.

The Department of Labor claims that the increased salary test level will “give employees higher earnings in the form of transfers of income from employers to employees,” but that assertion is inconsistent with economic reasoning.  Even the economic studies cited in the NPRM cast doubt on that assumption. 

On September 8, 2023, a Notice of Proposed Rule Making (NPRM) from the Department of Labor was published in the Federal Register titled “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees.”

The Department of Labor’s Notice of Proposed Rulemaking (NPRM) regarding the white-collar exemption to the Fair Labor Standards Act (FLSA) includes an initial regulatory flexibility analysis that is required for all regulations that will have a material impact on small businesses.  In that analysis, the Department concludes that 1.3 million workers employed by between 179,700 and 1.3 million small businesses will be impacted by the substantial increase in the white-collar exemption salary threshold in the NPRM.  However, that analysis almost certainly understates the impact on small businesses.

We gathered our Labor and Employment experts together and asked them:  What is the “Great Resignation,” and what does it mean for employers?

Excerpts of their wide-ranging conversation were lightly edited for clarity and reported here.

Join expert labor economists from Edgeworth Economics and Kevin White, co-chair of the Hunton Andrews Kurth Labor and Employment team, on July 21 for this complimentary webinar addressing key legal issues arising in the COVID-19 world of which employers should be aware.

Dr. Deborah Foster will speak at the 16th Annual Georgetown Law AEDI plenary panel entitled, "Statistics: Oh What Stories Your Data Can Tell."

In this two-hour live webcast, hosted by The Knowledge Group, Dr. Deborah Foster will serve on a panel of seasoned leaders and professionals who will help the audience understand the most important aspects of Wage and Hour Class Actions. 

Dr. Foster will present on "The Latest on the New WhiteCollar Exemption Overtime Regulations: Analyzing the Practical Implications of the New Rules, Strategies for Minimizing Litigation Risks, and Defending Against Claims of Violation Once Litigation is Brought."

In this webinar, to be hosted by Bridgeport Continuing Education Programs, Edgeworth Economics Partners Chuck Fields and Dr. Deborah Foster will join Dr. Brandy Ware and Dr. Anand Subramanian of JFA Associates, to provide several options available to estimate work time and understand employees' activities so that firms can make informed decisions regarding employee classification.

Join Drs. Stephen Bronars, Deborah Foster, and Nathan Woods as they discuss the potential impact of the DOL's white collar exemption rule changes in this complimentary webinar.

Join Drs. Stephen Bronars, Deborah Foster, and Nathan Woods as they discuss the potential impact of the DOL's white collar exemption rule changes in this complimentary webinar. 

Deborah Foster was retained by the defendant in a wage and hour case, Mkhitarian v. Bank of the West, in which employees at branches of a California bank alleged that their employer violated California law by “failing to pay them for all hours worked, missed, short, late, and/or interrupted meal periods and/or rest breaks.”

Dr. Deborah Foster cited by the California Court of Appeal in matter relating to improper rounding and regular rate of pay in California law.

An Edgeworth Economics team was retained by two California hospitals accused of violating California labor law by using a payroll system that automatically rounded employees’ hours up or down to the nearest quarter-hour. 

Edgeworth Economics is pleased to announce that labor and employment expert Dr. Deborah Foster has joined the firm as a Partner in the Washington, D.C., office.