Federal minimum wage increase stalls, but other wage and hour action likely
Date Posted: 09/01/2022
An increase in the federal minimum wage looked like a possibility last spring, with bills like the Raise the Wage Act under consideration in Congress.
Interest in that topic has cooled considerably, however, as legislators shift their attention elsewhere.
While the federal minimum wage remains $7.25 per hour, changes to wage and hour regulations are still on the horizon. The Department of Labor (DOL) is preparing to take action on several issues:
- • White collar exemptions: A proposal updating exemptions from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements is scheduled to be released in October. The exemptions apply to executive, administrative, professional, outside sales, and computer employees. The changes will address how these employees are defined and the limits placed on the exemptions.
- • Independent contractors: The DOL announced on June 3 that it is developing a rule on determining employer or independent contractor status under the FLSA. The agency had published a rule on this topic on January 7, 2021, but it was delayed and then withdrawn. A court reinstated the rule in March, however, so it remains in effect. In a news release announcing the development of a new independent contractor rule, the DOL says that the rule now in effect “was inconsistent with the Fair Labor Standards Act’s text and purpose.” With the rule, the department is looking to address employee misclassification. At the heart of the matter are employee workplace protections, such as minimum wage and overtime rights, which do not apply to independent contractors.
- • Prevailing wages for government contactors: The DOL plans to revise regulations relating to the Davis-Bacon and Related Acts, which apply to federal construction projects in excess of $2,000. Covered contractors and subcontractors must pay workers employed under the contract no less than the local prevailing wage rates and fringe benefits, as required by a wage determination. The proposed updates would impact enforcement of the act and how the rates are set. A public comment period on the changes ended in May, and a final rule is scheduled to be released in December.
Labor law posting impact?
While a change to the federal minimum wage rate will bring a required posting update to the FLSA poster, that update is not imminent because of a lack of Congressional action on the issue.
The FLSA poster also mentions that some occupations are exempt from minimum wage and overtime pay. Because the poster does not provide details, however, it is unlikely that changes to white collar exemptions will bring a mandatory posting change.
Information about independent contractors is also on the FLSA poster, and the poster notes that it is important for employers to know the difference between an independent contractor and employee. Unless the DOL regulations call for additional information on the topic to be provided to employees, it is doubtful that a new independent contractor rule will require employers to display an updated poster.
Federal contractors might need to watch for a posting update, however. Changes to the Davis-Bacon and Related Acts could impact the information on the “Employer Rights Under the Davis-Bacon Act” poster that covered contractors must display. This would require covered contractors to put up a new version of the poster.