Federal Rule Change To Result In Salary Bumps For Am. Samoans

Some white collar workers to get significant raise

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, May 24, 2016) – The “special salary level” for salary workers — who are considered exempt ‘white collar’ employees in American Samoa — will get a hike of nearly $400 a week under a US Department of Labor final rule published yesterday in federal portal, regulations.gov and the federal registry website, under the heading, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.

 
“The minimum guaranteed salary level for ‘exempt’ staff [in American Samoa] will increase from $380 per week — the current standard — to $767 per week on Dec. 1, 2016,” USDOL’s San Francisco based spokesman Jose Carnevali confirmed to Samoa News yesterday morning.
 
Two senior USDOL officials will be on island starting tomorrow to meet with local employers and employees, to discuss among other things, the new hike for exempted employees.
 
Samoa News had previously reported on the rule, when it was first proposed last year in the summer, and comments were accepted until last September. The increase will be lower than the federal level due to low minimum wage levels in American Samoa.
 
According to USDOL Wage and Hour Division, the federal Fair Labor Standards Act (FLSA or Act) — which guarantees minimum wage and overtime pay at a rate of not less than one and one-half times the employee’s regular rate for hours worked over 40 in a workweek — provides a number of exemptions.
 
Additionally, the exemption is premised on the belief that these kinds of workers typically earn salaries well above the minimum wage and enjoy other privileges, including above-average fringe benefits, greater job security, and better opportunities for advancement; setting them apart from workers entitled to overtime pay. The statute delegates to the Secretary of Labor the authority to define and delimit the terms of the exemption.
 
In the final rule, first announced jointly last week by USDOL and the White House, USDOL says the agency revises final regulations under the FLSA implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees. This exemption is referred to as the FLSA’s “EAP” or “white collar” exemption. (It also means that these are salaried employees exempted from overtime pay.)
 
To be considered exempt, employees must meet certain minimum tests related to their primary job duties and be paid on a salary basis at not less than a specified minimum amount.  The current exemption of $455 a week at the federal level was last updated in 2004.
 
For American Samoa, which was also last updated in 2004, USDOL says the federal agency has historically applied a special salary level test to employees in American Samoa because minimum wage rates there have remained lower than the federal minimum wage, which is currently $7.25 per hour.
 
Current federal law provides that the American Samoa minimum wage for each industry will increase by $0.40 on September 30, 2018, and continue to increase every three years thereafter until each equals the federal minimum wage.
 
Local minimum wage ranges from $4.58 to $5.99 an hour depending on the industry, “and so the disparity with the federal minimum wage is expected to remain for the foreseeable future,” the agency says.
 
During the public comment period, USDOL received only one comment — from a US based law firm experienced in FLSA law — supporting the provision on American Samoa.
 
Samoa News should point out that the proposed hike for employees in American Samoa does not include locally based federal workers. Full details of the new ruling affecting American Samoa and other provisions are available on www.regulations.gov
 
Responding to Samoa News questions, Carnevali said the final rule affects public and many private sector employers in the territory. For employers subject to the FLSA, he said a “guaranteed salary level must be paid to certain ‘exempt’ workers that the employer chooses to not pay an overtime premium for hours worked in excess of 40 hours in a workweek.”
 
Asked if the USDOL will start contacting local employees about the final rule, he responded that USDOL-WHD assistant district director WHD Min Kirk and investigator Brenda Hannah will be in the territory today. Kirk returns to Honolulu this Friday while Hannah will remain in American Samoa through Sept. 23.
 
During the visit, the USDOL officials will schedule meetings with interested employers, employees and representatives to learn more about this exemption provision of the FLSA.
 
In addition to providing compliance assistance to the public, Hannah will also visit with employers to determine their status of compliance with various federal statutes, including the FLSA and the Family Medical Leave Act among other programs, according to Carnevali.

The Samoa News
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Comments

This was an interesting aspect of the new Federal Overtime Laws. The article inspired a few questions that it didn't answer for me. Which Federal employees in American Samoa will get the pay raise if its not the local ones? Just the foreign ones there working (i.e. Mainland USA workers who transferred to American Samoa?) Also how will this wage disparity impact the rest of the American Samoa economy? Will the price of goods go up to become too expensive for the main population? There are some definite impact that will be felt on the mainland and this article does a good job of explaining it http://www3.swipeclock.com/updated-federal-overtime-law-means-tracking-time-employees/

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