Work it Out Blog

Proposed Regulations Expanding Overtime Eligibility to be Released Soon

Jun 15, 2015

Last year, President Barack Obama signed a Memorandum ordering the Secretary of Labor and the Labor Department to draft new overtime rules expanding minimum overtime eligibility requirements in order to reduce the number of workers who are exempt from overtime pay.  The proposed regulations are expected to be released sometime this month.

The current Fair Labor Standards Act (FLSA) rules provide a threshold of $23,660 per year.  Certain so-called white collar workers (executive, professional, and administrative employees) whose salary exceeds the threshold are exempt from overtime pay.  Based upon statements from members of Congress and President Obama, it is anticipated that the income threshold will be raised as high as $52,000 per year, entitling an additional 6.1 million workers to overtime pay.  This threshold increase will have a significant impact on employers, particularly those in manufacturing, restaurant, and retail businesses.  Impacted employers will incur higher overtime costs, and a possibility of increased lawsuits should they fail to comply with the new rules once they are finalized.

The pending release of the proposed regulations serves as a reminder for all employers to review their operations to verify that they are in compliance with current FLSA overtime rules, and to prepare to make changes in accordance with the new rules.  We recommend conducting regular internal audits to ensure employee classifications are proper and up to date, and that employee hours worked and overtime are being tracked accurately.  Employers should also review company policies related to “off-the-clock” work and employee breaks to confirm there are no FLSA compliance issues.  Finally, employers should stay current on the status of the Labor Department’s rule proposals to ensure they are prepared to act in accordance with any new requirements as they become effective.  Keep your eye out for an alert from Day Ketterer when the proposed rules are released.

Your Day Ketterer attorney is available to help you and your business review the current regulations, and to prepare for the upcoming changes.  Please contact Michelle Reese at mrreese@dayketterer.com,  or your Day Ketterer attorney at info@dayketterer.com  for more information.  

The content of this blog is for informational purposes only and is not intended as legal advice for any purpose. This blog is not intended to present an exhaustive summary of all applicable laws, or to take the place of legal advice.  If you have any questions regarding the law, please contact us for assistance.