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Are You Prepared for Revisions to Federal Regulations on Overtime?

First few Article Sentences

Employee rights and working conditions have been an increasingly popular issue in local and national debates. While much of the focus has been on minimum wage, employers need to pay attention to President Obama's March 13, 2014 directive to the Department of Labor ("DOL") to update the regulations governing overtime rules. Although DOL has not yet issued the new regulations, it has announced it will continue enforcing current regulations, including increased scrutiny on employers' classification of their employees as exempt from overtime regulations.

The Fair Labor Standards Act, or FLSA, establishes the federal minimum wage and requires that employers pay overtime - 1.5 times the hourly wage for any work beyond 40 hours per week - with an exemption for managerial and administrative staff. In order to meet the threshold to be overtime-exempt, employees must make more than a certain amount per week - the salary threshold (currently $455 per week) - and then must satisfy a duties test. The test looks at whether the employee performs certain required managerial, administrative, or professional tasks, such as supervising other workers and exercising independent judgment. Contrary to popular belief, overtime rules apply just as much to salaried workers as they do to hourly workers. If an employee's fixed salary falls below the salary threshold, or the employee does not meet the duties test for overtime exemption, then the employer must pay the salaried worker 1.5 times the hourly wage for work that exceeds 40 hours per week.

Nealey Meier, Kristin


Ryan, Swanson & Cleveland, PLLC

Law, Employment

June 7, 2015

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