Ever since President Barack Obama on March 13, 2014, signed a memorandum directing the U.S. Department of Labor (DOL) to update the Fair Labor Standards Act (FLSA) overtime regulations, it has perhaps been the most talked about issue in employment law. This is understandable, given the tremendous scope of the FLSA, which applies to virtually all employers in both the public and private sectors. According to DOL, the primary objectives for the update are to (1) ensure workers are paid fair pay for a fair day’s work; (2) modernize and simplify the regulations; and (3) ensure the FLSA’s intended protections are fully implemented. The last time DOL made changes to the overtime regulations was in 2004. The proposed regulations govern the rules on who can be properly classified as exempt from overtime laws; they were published in the Federal Register on July 6, 2015.
Exemptions
The proposed regulations seek to revise what are commonly referred to as the “white-collar exemptions.” Under these exemptions, certain types of “exempt” employees are generally not entitled to overtime if they satisfy three tests: (1) they are paid on a “salary basis”; (2) they satisfy the applicable “duties” test; and (3) they are paid the prescribed minimum salary level.
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