The White House issued a presidential memorandum on March 13, 2014 directing the U.S. Department of Labor to modernize and streamline the federal Fair Labor Standard Act’s overtime pay regulations by expanding overtime eligibility for more workers. Specifically, President Obama advised the Secretary of Labor to consider how the FLSA’s white-collar overtime exemption could be simplified and updated to address the changing nature of the American workplace.
The FLSA requires employers to pay most employees overtime pay at one and one-half times their regular wage for work they perform in excess of 40 hours per week. However, the so-called “white-collar exemption” excludes those employed in bona fide executive, administrative, professional, and outside sales positions.
Currently, to qualify for the white-collar exemption, employees must be paid at least $455 per week on a salary basis, and their job duties must meet specific tests – such as including managerial or supervisory responsibility, or requiring advanced knowledge or independent judgment. The exemption was originally intended for high-paid, white-collar employees, but overtime laws have not kept up with the economy, and workers earning as little as $23,660 per year are now deemed ineligible for overtime pay under the law.
The attorneys in Sommers Schwartz’s Wage & Hour Litigation Group are closely monitoring these important developments in the law. If you have questions about whether your job is exempt from overtime pay under the FLSA regulations, call Sommers Schwartz for a free consultation.