Kara M. Ariail and David S. Black are partners in our Northern Virginia office and Bob Tompkins is a partner in our Washington, D.C office.
The Department of Labor is expected to announce its final rule
regarding the white collar overtime exemptions under the Fair Labor
Standards Act tomorrow at an event in Ohio attended by Vice
President Joe Biden and Secretary of Labor Thomas Perez. The
final rule is expected to be published in the Federal Register
soon, perhaps as early as tomorrow.
Under the revised rule, the minimum annual salary level threshold
to qualify for the exemption will be increased to $47,500, with
automatic annual updates. We anticipate the highly compensated
salary threshold will also be increased. No changes to the current
duties test are anticipated in this rule.
This rule is significant and will substantially impact those
clients with a high number of employees currently treated as exempt
and paid less than the new salary threshold. This rule may have a
significant impact on government contractors, given the overall
compliance environment and the pending "Fair Pay and Safe
Workplaces" final rule, which is also anticipated to be
released soon. Among other things, these revisions, when effective,
may create a basis for contractors to seek a price or equitable
adjustment in existing contracts. They also suggest that government
contractors should factor these new requirements into their bid and
proposal strategies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.