The Fair Labor Standards Act (FLSA) dictates which employees must be paid overtime, and which employees are exempt from the overtime rules. Last year, the U.S. Department of Labor (DOL) issued proposed changes to the FLSA rules regarding overtime, and these rules were submitted for review in March of 2016. The DOL is expecting the final rule to be published any day now, and the changes will significantly affect which employees are entitled to overtime pay.
The new rule changes will affect “white collar” workers, and will have the greatest impact in states with a large population of white collar workers, like California, Florida, and New York.
Currently, Section 13(a)(1) of the FLSA provides that employees are exempt from overtime pay if they work in an executive, administrative, or professional capacity, and meet certain other requirements. One of these requirements is based on the employee’s salary.
In order for a white collar worker to be exempt from overtime pay, he or she must earn a minimum of $455 per week, or approximately $23,660 per year. The new rules are expected to at least double this requirement to somewhere around $970 per week, or about $50,440 per year.
Once the new rules are published, employers will have only 60 days to comply with the new law. Employers will either need to raise the income of salaried exempt workers to above $970 per week, or begin paying overtime to many more employees.
Experts estimate that the changes to the FLSA will affect over five million workers. If you are currently working as an executive, administrator, or other type of professional, be aware that your employer may have an obligation to either give you a raise or start paying overtime by the end of this summer.
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