March 15, 2016

White Collar Overtime Rule Changes Imminent: Pay Attention NOW!

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The fears from last summer about increases to the salary base for white collar workers who are exempt from overtime are back. Despite significant concern from some lawmakers and the business community, the Department of Labor sent its final rule revising white collar overtime exemption regulations to the White House Office of Management and Budget (OMB) last month. OMB’s review is the last step before this become a reality for employers. This means employers only have weeks to get ready for these changes in order to be compliant with the FLSA.  

Right now, it is unknown what the final rule will look like—or if it will resemble the onerous proposal issued last July. The proposed rule would require paying white collar exempt employees $970 per week, or $50,440 per year. This is substantially more than the current amount of $455 per week. The urgency to move this rulemaking forward is likely due to election year politics.

What does this mean for employers? The compliance timeline just got compressed. Reviewing potentially impacted exempt employees should begin now as the impact could be significant.  Begin by looking at any exempt employees who earn less than $50,440 per year. Framework Legal is available to assist with such wage and hour audits and help plan for the necessary adjustment to address the upcoming changes.  

Catherine is a principal member of Pearson Law Group where she provides employment law expertise of a big firm at small firm rates since 2004.


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