DOL to Issue Proposed Rule Updating Overtime Salary Requirements

For the past several months, there has been a fair amount of anticipation and promotion about what to expect from the Department of Labor (DOL) in updating regulations related to overtime. The Fair Labor Standards Act (FLSA) establishes, among other things, the basic criteria for when an employer must pay overtime to its employees. The DOL has the authority to issue regulations and guidance related to those requirements to better define an employer’s obligations under the law. The current federal administration has made it a priority to review the existing regulations, with a focus on the required wage threshold for an employer to be able to classify an employee as exempt from the overtime requirements of the FLSA.

The existing regulations impose a minimum salary requirement of $455.00 per week that applies to all potential exempt employees, which amounts to an annual income of $23,660.00. President Obama, along with the DOL, has issued information that a proposed rule addressing exemptions will impose a wage or salary requirement of $50,400.00, or approximately $970.00 per week, more than twice the existing requirement. To help illustrate the change, the DOL created a graphic story found at http://www.dol.gov/featured/overtime/. Not surprisingly, while the DOL describes the hardships of the employee, there is no information about any hardships an employer will face due to the change or how the DOL chose the new proposed requirement.

While an update of the current requirements may be in order, it is important for business affected by this proposed rule to be a part of the process so that our government can make an informed decision. The anticipated Notice of Proposed Rulemaking can be found at this location - http://www.dol.gov/whd/overtime/NPRM2015/OT-NPRM.pdf - and includes nearly 300 pages of information and analysis. Look to our website for additional information regarding that information, but in the meantime, review the process for providing comments to the DOL contained in the first few pages. If your business is affected, take part in the process and provide comments. Given the magnitude of the change, the business side of this equation stands to lose a great deal through ignorance and complacency.

Should you have questions regarding the potential effects of the proposed rules, please feel free to contact me.

  Jason C. Taylor
  jtaylor@mcconnaughhay.com
  (850) 222-8121