81 FR 32390 - Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Announcement of Time-Limited Non-Enforcement Policy for Providers of Medicaid-Funded Services for Individuals With Intellectual or Developmental Disabilities in Residential Homes and Facilities With 15 or Fewer Beds
DEPARTMENT OF LABOR
Wage and Hour Division Federal Register Volume 81, Issue 99 (May 23, 2016)
Wage and Hour Division
Federal Register Volume 81, Issue 99 (May 23, 2016)
| Page Range | 32390-32391 | |
| FR Document | 2016-11753 |
[Federal Register Volume 81, Number 99 (Monday, May 23, 2016)] [Rules and Regulations] [Pages 32390-32391] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-11753] [[Page 32389]] Vol. 81 Monday, No. 99 May 23, 2016 Part II Department of Labor ----------------------------------------------------------------------- Wage and Hour Division ----------------------------------------------------------------------- 29 CFR Part 541 Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Announcement of Time-Limited Non-Enforcement Policy for Providers of Medicaid-Funded Services for Individuals With Intellectual or Developmental Disabilities in Residential Homes and Facilities With 15 or Fewer Beds and Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Final Rules Federal Register / Vol. 81 , No. 99 / Monday, May 23, 2016 / Rules and Regulations [[Page 32390]] ----------------------------------------------------------------------- DEPARTMENT OF LABOR Wage and Hour Division 29 CFR Part 541 Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Announcement of Time-Limited Non-Enforcement Policy for Providers of Medicaid-Funded Services for Individuals With Intellectual or Developmental Disabilities in Residential Homes and Facilities With 15 or Fewer Beds AGENCY: Wage and Hour Division, Department of Labor. ACTION: Announcement of policy. ----------------------------------------------------------------------- SUMMARY: The Department of Labor's (Department or DOL) Final Rule revising the regulations for implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees, published in the Rules section of today's Federal Register, will become effective December 1, 2016. This document announces a time-limited non-enforcement policy for providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds. From December 1, 2016 to March 17, 2019, the Department will not enforce the updated salary threshold of $913 per week for the subset of employers covered by this non-enforcement policy. Throughout the duration of this non-enforcement policy, the Department will engage in outreach and technical assistance efforts, including to providers of services in settings covered by this policy. This non-enforcement policy does not apply to providers of Medicaid- funded services for individuals with intellectual or developmental disabilities in residential care facilities with 16 or more beds. DATES: May 23, 2016. FOR FURTHER INFORMATION CONTACT: Director, Division of Regulations, Legislation and Interpretation, U.S. Department of Labor, Wage and Hour Division, Room S-3502, 200 Constitution Avenue NW., Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number). Copies of this docuemnt may be obtained in alternative formats (Large Print, Braille, Audio Tape or Disc), upon request, by calling (202) 693-0675 (this is not a toll-free number). TTY/TDD callers may dial toll-free 1-877-889-5627 to obtain information or request materials in alternative formats. SUPPLEMENTARY INFORMATION: I. Non-Enforcement Policy Today, the Department's Wage and Hour Division issued Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Final Rule (``Overtime Final Rule'' or ``Final Rule''). This Final Rule revised the regulations under the FLSA implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees. These exemptions are frequently referred to as the ``white collar'' exemptions and are contained in 29 CFR part 541. To be considered exempt under Part 541, employees must meet certain minimum requirements related to their primary job duties and, in most instances, must be paid on a salary basis at not less than the minimum amounts specified in the regulations. Among other changes, the Final Rule updated the salary level above which certain white collar workers may be exempt from overtime pay requirements from the previous level of $455 per week (the equivalent of $23,660 per year) to a new level of $913 per week (the equivalent of $47,476 per year). The Department set an effective date of December 1, 2016 for the Final Rule, explaining that this will provide employers sufficient time--more than 180 days--to make any changes that are necessary to comply with the final regulations. The Department and the U.S. Department of Health and Human Services (``HHS'') have engaged in appropriate interagency discussions regarding the interaction between the Overtime Final Rule and HHS' policy and regulatory priorities. During these communications HHS expressed particular concerns about the Final Rule's impact on residential homes and facilities for individuals with intellectual or developmental disabilities with 15 or fewer beds. HHS also voiced concern that the December 1, 2016 effective date could affect the federal government's efforts to encourage the use of such community-based providers, and stated that providing this subset of Medicaid-funded providers additional time to implement these requirements could help mitigate potential budgeting and implementation concerns for these providers. HHS conveyed that the Final Rule coincides with implementation of certain provisions of its rule affecting states' provision of Medicaid home and community-based services (``HCBS''). See 79 FR 2948 (Jan. 16, 2014). Among its provisions, this HHS rule requires that all settings for HCBS be integrated in and support the beneficiary's full access to the greater community and requires States and the provider infrastructure on which these services rely to implement necessary enhancements to their Medicaid home and community based systems to comply with these new requirements. States have until March 17, 2019 to implement approved transition plans under which providers must be in full compliance with the rule, and HHS expressed concern that the timing of the Overtime Final Rule could undermine compliance efforts of HCBS providers. The Department is committed to working with HHS to ensure that implementation of the Overtime Final Rule does not compromise its agency priorities or regulations. Based on these discussions with HHS, the Department has determined that DOL enforcement of the new salary threshold in the Overtime Final Rule in the period immediately following the December 1, 2016 effective date could have an impact on the use of these types of community-based facilities. Providing this subset of providers of Medicaid-funded services additional time to transition and seek technical assistance from the Department without being subject to DOL enforcement of the new salary threshold may mitigate some potential budgeting and implementation concerns. Providers in this subset of Medicaid-funded residential homes and facilities face a unique combination of challenges in balancing the goal of shifting care of individuals with intellectual or developmental disabilities to small community-based settings and meeting the timeline for implementing the HHS rule impacting HCBS providers, with the fact that these facilities are small, dependent on Medicaid funding in state budgets, and serve vulnerable populations. The non-enforcement policy will allow the Department to devote its time and resources to providing assistance to these providers of services at small community-based facilities, and will allow these employers time, if needed, to work with their state legislatures and HHS on implementation of the Overtime Final Rule. Accordingly, after carefully considering appropriate interagency discussions with HHS, the Department has decided to enact a time- limited non-enforcement policy for providers of Medicaid-funded services for [[Page 32391]] individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds. This non- enforcement period will last from December 1, 2016 (the effective date of the Overtime Final Rule) until March 17, 2019. During this period of non-enforcement, the Department will not enforce the updated salary threshold of $913 per week for the subset of employers covered by this non-enforcement policy. However, the Department will continue to enforce all other provisions of the Overtime Final Rule as to this subset of employers, including in instances involving employees who meet the salary basis and duties tests but who earn less than the previous salary threshold of $455 per week. The non-enforcement policy does not apply to providers of Medicaid- funded services for individuals with intellectual or developmental disabilities in residential care facilities with 16 or more beds. Regulatory Requirements This document is non-binding guidance articulating considerations relevant to the Department's exercise of its enforcement authority under the FLSA. It is therefore exempt from the notice-and-comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b). Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a). The Department has determined that this guidance does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Authority: 29 U.S.C. 216(c); Secretary's Order No. 01-2014. Mary Ziegler, Assistant Administrator for Policy, Wage and Hour Division. [FR Doc. 2016-11753 Filed 5-18-16; 8:45 am] BILLING CODE 4510-27-P
![Federal Register / Vol. 81, No. 99 / Monday, May 23, 2016 / Rules and Regulations 32391
individuals with intellectual or DEPARTMENT OF LABOR The Department also adds a provision to
developmental disabilities in residential the regulations that automatically
homes and facilities with 15 or fewer Wage and Hour Division updates the standard salary level and
beds. This non-enforcement period will HCE compensation requirements every
last from December 1, 2016 (the 29 CFR Part 541 three years by maintaining the earnings
effective date of the Overtime Final RIN 1235–AA11 percentiles set in this Final Rule to
Rule) until March 17, 2019. During this prevent these thresholds from becoming
period of non-enforcement, the Defining and Delimiting the outdated. Finally, the Department has
Department will not enforce the Exemptions for Executive, not made any changes in this Final Rule
updated salary threshold of $913 per Administrative, Professional, Outside to the duties tests for the EAP
week for the subset of employers Sales and Computer Employees exemption.
covered by this non-enforcement policy. AGENCY: Wage and Hour Division, DATES: This Final Rule is effective on
However, the Department will continue Department of Labor. December 1, 2016.
to enforce all other provisions of the ACTION: Final rule. FOR FURTHER INFORMATION CONTACT:
Overtime Final Rule as to this subset of Director, Division of Regulations,
employers, including in instances SUMMARY: The Fair Labor Standards Act Legislation and Interpretation, U.S.
involving employees who meet the (FLSA or Act) guarantees a minimum Department of Labor, Wage and Hour
salary basis and duties tests but who wage for all hours worked during the Division, Room S–3502, 200
earn less than the previous salary workweek and overtime premium pay of Constitution Avenue NW., Washington,
not less than one and one-half times the DC 20210; telephone: (202) 693–0406
threshold of $455 per week. The non-
employee’s regular rate of pay for hours (this is not a toll-free number). Copies
enforcement policy does not apply to
worked over 40 in a workweek. While of this Final Rule may be obtained in
providers of Medicaid- funded services these protections extend to most
for individuals with intellectual or alternative formats (Large Print, Braille,
workers, the FLSA does provide a Audio Tape or Disc), upon request, by
developmental disabilities in residential number of exemptions. In this Final
care facilities with 16 or more beds. calling (202) 693–0675 (this is not a toll-
Rule, the Department of Labor free number). TTY/TDD callers may dial
Regulatory Requirements (Department) revises final regulations toll-free 1–877–889–5627 to obtain
under the FLSA implementing the information or request materials in
This document is non-binding exemption from minimum wage and alternative formats.
guidance articulating considerations overtime pay for executive, Questions of interpretation and/or
relevant to the Department’s exercise of administrative, professional, outside enforcement of the agency’s regulations
its enforcement authority under the sales, and computer employees. These may be directed to the nearest Wage and
FLSA. It is therefore exempt from the exemptions are frequently referred to as Hour Division (WHD) district office.
notice-and-comment rulemaking the ‘‘EAP’’ or ‘‘white collar’’ Locate the nearest office by calling the
requirements under the Administrative exemptions. To be considered exempt WHD’s toll-free help line at (866) 4US–
Procedure Act pursuant to 5 U.S.C. under part 541, employees must meet WAGE ((866) 487–9243) between 8 a.m.
553(b). certain minimum requirements related and 5 p.m. in your local time zone, or
to their primary job duties and, in most log onto WHD’s Web site at http://
Because no notice of proposed instances, must be paid on a salary basis
rulemaking is required, the Regulatory www.dol.gov/whd/america2.htm for a
at not less than the minimum amounts nationwide listing of WHD district and
Flexibility Act does not require an specified in the regulations.
initial or final regulatory flexibility area offices.
In this Final Rule the Department
analysis. 5 U.S.C. 603(a), 604(a). The SUPPLEMENTARY INFORMATION:
updates the standard salary level and
Department has determined that this total annual compensation requirements Table of Contents
guidance does not impose any new or to more effectively distinguish between
I. Executive Summary
revise any existing recordkeeping, overtime-eligible white collar II. Background
reporting, or disclosure requirements on employees and those who may be A. What the FLSA Provides
covered entities or members of the exempt, thereby making the exemption B. Legislative History
public that would be collections of easier for employers and employees to C. Regulatory History
information requiring OMB approval understand and ensuring that the D. Overview of Existing Regulatory
under the Paperwork Reduction Act, 44 FLSA’s intended overtime protections Requirements
are fully implemented. The Department E. Presidential Memorandum
U.S.C. 3501 et seq.
sets the standard salary level for exempt F. The Department’s Proposal
Authority: 29 U.S.C. 216(c); Secretary’s EAP employees at the 40th percentile of G. Effective Date
Order No. 01–2014. III. Need for Rulemaking
weekly earnings of full-time salaried IV. Final Regulatory Revisions
Mary Ziegler, workers in the lowest-wage Census A. Standard Salary Level
Assistant Administrator for Policy, Wage and Region. The Department also permits B. Special Salary Tests
Hour Division. employers to satisfy up to 10 percent of C. Inclusion of Nondiscretionary Bonuses,
[FR Doc. 2016–11753 Filed 5–18–16; 8:45 am]
the standard salary requirement with Incentive Payments, and Commissions in
nondiscretionary bonuses, incentive the Salary Level Requirement
BILLING CODE 4510–27–P D. Highly Compensated Employees
payments, and commissions, provided
mstockstill on DSK3G9T082PROD with RULES2
these forms of compensation are paid at E. Automatic Updates
least quarterly. The Department sets the F. Duties Requirements for Exemption
V. Paperwork Reduction Act
total annual compensation requirement VI. Analysis Conducted in Accordance With
for an exempt Highly Compensated Executive Order 12866, Regulatory
Employee (HCE) equal to the annualized Planning and Review, and Executive
weekly earnings of the 90th percentile Order 13563, Improving Regulation and
of full-time salaried workers nationally. Regulatory Review
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Document Created: 2018-02-07 15:07:22
Document Modified: 2018-02-07 15:07:22
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Announcement of policy. | |
| Dates | May 23, 2016. | |
| Contact | Director, Division of Regulations, Legislation and Interpretation, U.S. Department of Labor, Wage and Hour Division, Room S-3502, 200 Constitution Avenue NW., Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number). Copies of this docuemnt may be obtained in alternative formats (Large Print, Braille, Audio Tape or Disc), upon request, by calling (202) 693-0675 (this is not a toll-free number). TTY/TDD callers may dial toll-free 1-877-889-5627 to obtain information or request materials in alternative formats. | |
| FR Citation | 81 FR 32390 |
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