Many Exempt Employees With Salaries $30,000 To $50,000 May Soon Be Entitled To Overtime

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On March 13, 2014, President Obama signed a memorandum directing the United States Department of Labor to revise the regulations concerning employees' eligibility for overtime pay under the Fair Labor Standards Act ("FLSA"). Currently, employees with salaries of $23,500 or more may be exempt from receiving 1.5 times their regular pay rate in overtime pay if their duties meet tests under the executive, administrative, and professional exemptions requiring managerial or supervisory responsibilities, advanced knowledge, or independent judgment. Although President Obama has not provided the specific nature of the changes to the exemptions he is seeking, it is likely that he will increase the salary pay requirement to a level between $35,000 to $50,000 per year.

The President's Memorandum describes the FLSA's executive, administrative, and professional exemptions as outdated, and states that "millions of Americans lack the protections of overtime and even the right to the minimum wage." During a press conference at the White House, President Obama said that "unfortunately, today, millions of Americans aren't getting the extra pay they deserve" because "an exception that was originally meant for high-paid, white-collar employees now covers workers earning as little as $23,660 a year." An unnamed White House official was quoted expanding on the President's Memorandum by saying...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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