Thursday, December 10th, 2015

Key Employees Still Overtime Exempt?

In the summer of 2015, the Department of Labor (“DOL”) indicated proposed changes to the Fair Labor Standards Act (“FLSA”) concerning overtime exemption regulations. Specifically, the DOL proposed doubling the minimum salary requirement for an employee to be exempt from overtime pay. Currently, the minimum salary requirement is $455 of earnings per week. The proposed changes would double the minimum salary requirement to $970 of earnings per week. Further, the proposed changes contemplate automatically updating the minimum salary requirement each year based upon a certain percentile (40%) of earnings of all full-time salaried workers.

The obvious impact of the proposed changes is the likelihood of more employees, despite being salaried, being eligible for overtime pay. As a result, employers will need to be cognizant of the exempt earnings amount on a continuing annual basis (as it would be adjusted each year) for their salaried employees to be sure they do not run afoul of the FLSA regulations.

At the present time, there is no specific timetable for when and if these rules will go into effect.  The Wall Street Journal has speculated, based upon comments by Solicitor of Labor Patricia Smith, that final regulations would not be issued until late 2016.

We will keep you posted on any updates when and if they become available.


Timothy J. Clifton

Author: Timothy J. Clifton