The U.S. Department of Labor (DOL) is poised to release its proposed revisions to the Fair Labor Standards Act’s (FLSA) so-called “white-collar” exemptions in the days ahead. Employers are waiting with baited breath for what is widely anticipated to have major financial implications for nearly all employers covered by the FLSA. The DOL’s regulations are expected to substantially expand the number of workers eligible for overtime pay under the FLSA, by increasing the minimum salary requirements for workers to be classified as exempt and therefore not eligible for overtime. The proposed regulations also likely will make more onerous the duties requirements to qualify as exempt under the FLSA’s white-collar exemptions. While the salary numbers that have been floating around in the media vary, the lowest minimum salary requirement being suggested is $42,000 per year, an almost 78 percent increase from the current salary threshold of $23,660 per year.
Background
In March 2014, President Obama issued a memorandum to DOL Secretary Thomas Perez directing him to “propose revisions to modernize and streamline the existing overtime regulations” of the FLSA. The memorandum specifically referenced the FLSA’s “white-collar” exemptions, stating that the regulations related to those exemptions “have not kept up with our modern economy” and that due to this, “millions of Americans lack the protections of overtime and even the right to minimum wage.” The memorandum charged Perez to revise the regulations to “update existing protections consistent with the intent of the act; address the changing nature of the workplace; and simplify the regulations to make them easier for both workers and businesses to understand and apply.”
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