A recent speech by Labor Secretary Thomas Perez at the IAFF conference provided some details about the changes to the managerial exemption to the Fair Labor Standards Act (“FLSA”). Significantly, Secretary Perez reiterated that the current salary threshold of $455 is inadequate and that the primary duties test creates an employer friendly “loophole” that is used to prevent many low income employees from earning overtime.
The last changes to the managerial exemption occurred in 2004 when the salary threshold was raised from $250 to $455. This was the second increase in the 40 years the exemption has existed. The remarks by Secretary Perez mirror those made by President Obama back on March 13th that the current $455 threshold is inadequate.