On July 6, 2015, the United States Department of Labor (DOL) published its highly-anticipated proposed rules that would require the payment of overtime to certain employees who currently have no entitlement to overtime.
Under the current Fair Labor Standards Act regulations, to be exempt from overtime pay, executive, professional and administrative employees must be paid a salary of at least $455 per week ($23,660 per year). Be reminded that simply paying employees by salary does not automatically exempt them from being entitled to receive overtime.
The DOL estimates that its proposed regulation would raise the salary requirement to $970 per week ($50,440 per year) in 2016. The net effect is that currently exempt employees who earn more than $23,600 but less than $50,440 would lose their overtime exemption and become entitled to overtime pay for all hours worked above 40 in a workweek.
In the coming months, the DOL will receive written comments from interested parties on the proposed regulation, meaning that there is currently no "effective date." In the meantime, employers should monitor these proposed changes and consider how, if implemented, they will impact current pay practices.
Some key points for employers to consider are:
|Dougherty, Anthony D. Partner and Chair of Corporate Investigations Practice and Co-Chair of Reputation Management Practice||Partner and Chair of Corporate Investigations Practice and Co-Chair of Reputation Management Practice||212.216.8099|
|Drogin, Laurent S. Partner and Chair of Labor and Employment Practice and Co-Chair of Restrictive Covenant Practice||Partner and Chair of Labor and Employment Practice and Co-Chair of Restrictive Covenant Practice||212.216.8016|
|Feder, Hagit Senior Compliance Administrator, CFE||Senior Compliance Administrator, CFE||212.216.1109|
|Kleinmann, David N. Partner and Co-Chair of Restrictive Covenant Practice||Partner and Co-Chair of Restrictive Covenant Practice||212.216.1115|
|Steer, Richard L. Partner and Chair of Employment Practices Liability Insurance Practice||Partner and Chair of Employment Practices Liability Insurance Practice||212.216.8070|
|Toevs Carolan, Tara Counsel||Counsel||212.216.8007|
|Zagorsky, Arthur Partner||Partner||212.216.8030|