In March 2014, President Obama directed the U.S. Department of Labor (DOL) to update existing overtime regulations for so-called “white collar” employees under the federal Fair Labor Standards Act (FLSA). In response to the president’s mandate, the DOL is preparing a proposed regulation entitled “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees.” The proposal is expected to narrow the “white collar” exemptions and make more workers eligible for overtime pay under federal law.
Just as significantly, the proposed regulation will also
increase the minimum weekly salary an employee must earn to qualify
as exempt from the FLSA’s minimum wage and overtime
requirements. Although it is unlikely that the DOL will unveil the
formal proposal for at least a few weeks, there are credible
reports that the DOL’s regulation will practically double the
minimum salary for exempt employees: from slightly under $24,000
per year ($455 per week to be precise) to $42,000. Although several
states’ laws already require higher weekly salaries than the
FLSA’s current threshold, few jurisdictions have
minimum salaries as high as the DOL’s anticipated proposal.
In New York, for instance, exempt employees must earn $656.75 per
week, or just over $34,000 per year.
Before it becomes final, the DOL's proposed regulation will be
subject to a public comment period and finalization. Stay tuned for
future updates as we learn more.
This article is presented for informational purposes only and is not intended to constitute legal advice.