On March 13, 2014, President Obama directed the Secretary of Labor to “modernize and streamline” the existing Fair Labor Standards Act (FLSA) overtime regulations, specifically with respect to the “white collar” exemptions. The Department of Labor (DOL) previously announced multiple target dates for the publication of new proposed regulations, including November 2014 and February 2015. These dates have come and gone, but Secretary of Labor Thomas Perez recently said that the DOL is still working on revising the regulations governing the existing white collar overtime exemptions.
According to Secretary Perez, new FLSA overtime regulations will be finalized and published this spring. They regulations are expected to increase the minimum salary amount and change the duties tests that would eliminate the exemptions’ application to many positions currently exempt from the federal overtime requirements.
Some speculate that the DOL will as much as double the salary threshold required for exemption. The current salary threshold for white collar employees is $455 per week. Such changes to the overtime regulations could increase the number of employees nationwide who qualify for overtime.
Current overtime regulations require that employees perform certain duties in order to be classified as exempt. An exempt administrative, executive, professional, computer, or outside sales employee must have his or her primary duty work that meets the first requirement of the standard duties test for the particular exemption. A determination of whether an employee passes the primary duty test is based on all the facts in a particular case. The amount of time spent in the performance of the required duties is one key factor. There is some talk that the DOL will change this and impose a hard and fast minimum fifty percent time requirement on exempt primary duties.
California’s white collar overtime exemptions govern most private sector employers in California, and are more narrowly drawn than those under the FLSA. Therefore, new federal regulations are not likely to affect private sector Californian employers. However, when it comes to overtime, public employers in California are generally governed by federal wage and hour law. Therefore, new FLSA regulations will likely require public employers in California to revisit exempt and non-exempt employee classifications.
Sacramento, CA 95821