Corporate PAC managers may soon find that the universe of employees who receive corporate PAC solicitations has unexpectedly shrunk.  In July 2015, the Department of Labor proposed new regulations that would dramatically increase the number of workers entitled to overtime wages.  The Department of Labor estimates that, under the new regulations, approximately 5 million new white collar workers could receive overtime pay.  Currently, salaried employees are not entitled to overtime pay if they perform certain duties and are paid at least $455 per week (the equivalent of $23,600 annually).  Under the proposed regulations, the duties test would remain the same but the salary threshold would increase to $921 per week/$47,892 annually.  This salary threshold would also be adjusted year-to-year, pegged at the 40th percentile of weekly earnings of full-time salaried workers.

In practice, because the FEC regulations and Fair Labor Standards Act regulations overlap to a degree, some companies take a shortcut in their legal analysis and solicit PAC contributions only from employees not entitled to overtime pay and refuse to solicit those entitled to overtime pay.  Thus, when the number of employees entitled to receive overtime pay increases, the universe of employees solicited by these corporate PACs may fall.
Legally, however, these regulations should not require companies to reduce the size of their restricted class.  While the FEC regulations look to Fair Labor Standards Act regulations for guidance in determining whether an individual’s duties place that individual in the restricted class, the FLSA’s salary cut-off on overtime payments is not relevant to this analysis.  Nonetheless, these new rules may present corporate PACs with a good opportunity to conduct a more thorough “restricted class review” to confirm that solicited employees all fall within the restricted class and to determine whether others may also be solicited.
Photo of Zachary G. Parks Zachary G. Parks

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside…

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside attorney for election law, campaign finance, pay-to-play and PAC issues.” Zachary is also a leading lawyer in the emerging corporate political disclosure field, regularly advising corporations on these issues.

Zachary’s expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules. He has also helped clients comply with the election and political laws of all 50 states. Zachary also frequently leads political law due diligence for investment firms and corporations during mergers and acquisitions.

He routinely advises corporations and corporate executives on instituting political law compliance programs and conducts compliance training for senior corporate executives and lobbyists. He also has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance and has defended his political law clients in investigations by the Federal Election Commission, the U.S. Department of Justice, Congressional committees, and in litigation.

Zachary is also the founder and chair of the J. Reuben Clark Law Society’s Political and Election Law Section.

Zachary also has extensive complex litigation experience, having litigated major environmental claims, class actions, and multi-district proceedings for financial institutions, corporations, and public entities.

From 2005 to 2006, Zachary was a law clerk for Judge Thomas B. Griffith on the United States Court of Appeals for the District of Columbia.

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