Friday, March 14, 2014

Obama Proposes New Overtime Regs

Yesterday, President Obama called on the Department of Labor to update the FLSA regulations regarding overtime. In a White House Fact Sheet, he identified the following reforms:

  • Update existing protections in keeping with the intention of the Fair Labor Standards Act.

  • Address the changing nature of the American workplace.

  • Simplify the overtime rules to make them easier for both workers and businesses to understand and apply.
That's a little vague - what does it mean? One thing Pres. Obama specifically referenced was the minimum threshold salary for certain overtime exemptions. It is currently $455 per week, set in 2004, which he noted would be $561 in today's dollars. I think it's a safe bet that number will increase under the new regs.

You can also read the President's actual memo to Secretary of Labor Thomas Perez. There are not a lot of clues there either. Both documents focus on the "white collar" exemptions (administrative, executive, and learned professional). No doubt, the regulations will further limit those exemptions in some way.

As the President noted, exempt employees may actually earn less than minimum wage. For a salaried employee making the minimum $455 per week, the tipping point is 63 hours (62 hours is $7.34/hour, and 63 hours is $7.22/hour).

Now we must wait and see what the DOL proposes.

Happy Pi Day!