[DATE]
Mary Ziegler
Director
Division of Regulations, Legislation and Interpretation
Wage and Hour Division
U.S. Department of Labor
Re: Comment on Proposed Rulemaking Defining and Delimiting the
Exemptions for Executive, Administrative, Professional, Outside Sales, and
Computer Employees (80 Fed. Reg. 38516, July 6, 2015), RIN: 1235-AA11
Dear Ms. Ziegler:
I am writing to you on behalf of [insert company name], a retailer with significant concerns
about the above-referenced rulemaking. The primary change to the U.S. Department of Labor’s
existing overtime rules is a proposal to more than double the minimum salary level needed to
qualify as exempt from overtime requirements. This dramatic and unprecedented increase would
have a number of significant and harmful consequences for the operation of [our/my] store.
Based on an untested and complicated methodology, DOL has proposed raising the salary
threshold to an estimated $50,440 in 2016, which would be automatically increased every year
thereafter. The recommendation to annually increase the level would create confusion and
uncertainty for both employers and employees and would place unfair administrative and legal
burdens on our company. It would make it difficult if not impossible to plan for and implement
yearly salary increases without significantly disrupting regular business operations.
Overall, the impact of these proposed changes would mean that there might be no exempt
employees in some of [our/my] locations. Additionally, retail managers who would be
reclassified because of the changes might lose incentive compensation opportunities, benefits,
flexibility and professional status that they highly value. Managers could also lose opportunities
for career progression and training as a result of the change in how they are classified.
On top of these impacts on current salaried workers, we expect that hourly workers would face
diminished opportunities for upward mobility as middle-management ranks shrink as a result of
the rule. The changes would also negatively impact customer service and prices and could result
in retailers looking further to automation. Like most retailers, we face fierce competition and thin
profit margins and simply cannot absorb significant volatility, uncertainty and increases in labor
costs.
In addition, no changes to the duties test should be made. The department modernized the duties
test in 2004 to reflect the realities of a 21st century economy, a move that recognized the unique
roles and responsibilities that retail managers have in their stores. In the retail industry, managers
want and need to have a “hands on” approach to ensure that operations run smoothly. Performing
hands-on work at the manager’s own discretion to ensure that operations are successfully run in
no way compromises the fact the manager’s most important responsibility is performing exempt
work. Additionally, any attempt to artificially cap the amount of time exempt managers can
spend on non-exempt work would place significant administrative burdens on retailers, increase
labor costs, cause customer service to suffer and result in an increase in wage-and-hour litigation.
In terms of the compliance burden of the proposed rule, the department has completely
underestimated the time and resources it would take for our company and other [small] retailers
to understand and comply with the changes. DOL’s estimate that it would take companies only
one hour to read and familiarize themselves with the rule, one hour per employee to adjust their
status, and five additional minutes per week to schedule and monitor each impacted employee is
inconsistent with the reality of our business. The magnitude of the changes made by the proposed
rule are substantial, and if left unchanged, would result in significant time and expense to ensure
that retailers are in compliance on an annual basis.
For all of these reasons, [company name] strongly opposes the proposed increase to the salary
level, any attempt to annually increase the salary level, and any changes to the duties test. Thank
you for considering these views.
Sincerely,
[Name]
[Title]