President Obama Directs USDOL To Revamp FLSA Overtime Exemptions So More Employees Are Eligible For Overtime Pay


On March 13, 2014, President Obama signed a Memorandum directing the U.S. Department of Labor (USDOL) to revamp the regulations regarding who qualifies for overtime under the Fair Labor Standards Act (FLSA).  The FLSA requires employers to pay overtime to employees who work over forty hours in a workweek.  The FLSA contains limited exemptions from overtime pay, such as for administrative, executive, and professional employees (the so-called white collar exemptions). The FLSA does not define these exemptions in detail, but it gives the USDOL authority to determine the scope of the exemptions.  Thus, through President Obama's Memorandum, the USDOL can narrow the scope of the overtime exemptions such that more employees will be eligible for overtime pay without congressional approval.  Although precise changes were not proposed, it is widely expected that the USDOL will propose narrowing the white collar exemptions, such as raising the salary requirement, which is currently $455 per week.  However, changes to the FLSA regulations can take more than a year to implement.  The USDOL is expected to present proposals for public comment by this summer, and the public comment period could take up to a year before the final regulations become effective.  Earlier this year, President Obama issued an Executive Order raising the minimum wage for federal contractors to $10.10 beginning in 2015.  The Fast Laner is monitoring these developments very closely and will provide further updates when they are available.

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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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