WASHINGTON – The U.S. Department of Labor’s Wage and Hour Division announced the publication of a technical amendment to restore the applicable regulations governing the exemption of executive, administrative, and professional employees under the Fair Labor Standards Act.
The Department’s technical amendment removes from the Code of Federal Regulations the regulatory language from a 2024 rule that was judicially vacated, and republishes the operative regulations, which were established in a rule the department issued in 2019.
The restored regulations require that most exempt executive, administrative, and professional employees be paid a salary of at least $684 per week. The regulations also set a total annual compensation threshold of $107,432 for certain highly compensated employees.
“The Wage and Hour Division is committed to ensuring that its regulations accurately reflect the proper standards and requirements that we enforce,” said Wage and Hour Division Administrator Andrew Rogers. “It is critical that each element of the section 13(a)(1) exemptions – duties, salary basis, and salary level requirements – be clearly framed for the benefit of both employees and employers.”
In particular, the proposed analysis would:
- Set forth distinct standards for determining joint employer status in “vertical” and “horizontal” scenarios.
- Advise that horizontal joint employment exists when separate employers are sufficiently associated with respect to the employment of the same employee, but that business relationships which have little to do with the employment of specific employees are alone insufficient to establish joint employment.
- Adopt a four-factor analysis for use in every case of potential vertical joint employment.
- Advise that “reserved control” may be considered but is less indicative of vertical joint employment than exercised control.
- Exclude consideration of certain factors that are relevant only in assessing whether a worker is an employee or independent contractor.
- Exclude the relevance of certain general business models and business practices when determining joint employment.
- Provide examples illustrating how the proposed analysis would apply in certain factual circumstances.
This technical amendment is effective immediately upon publication in the Federal Register.
Workers and employers can call the Wage and Hour Division with questions and requests for compliance assistance at its toll-free helpline, 866-4US-WAGE (487-9243). The agency’s PAID program offers employers an opportunity to self-report and resolve potential minimum wage and overtime violations under the FLSA, as well as certain potential violations under the Family and Medical Leave Act.
