On Tuesday, June 30, 2015, the United States Department of Labor (DOL) announced its proposals for updating regulations regarding the overtime exemptions for white-collar employees, such as executives, administrative and professional employees. The regulations were last updated in 2004. The most significant proposal would increase the current salary threshold for application of the exemption from $455 per week ($23,660 annually) to $970 per week ($50,440 annually).
In other words, under the new proposal, even assuming that an employee primarily performs executive, administrative or professional duties as currently provided by the DOL regulations, if the employee is paid less than $50,440 annually, the overtime exemption would not apply. The employee would be entitled to receive overtime pay for any hours worked over 40 hours in a pay period. The DOL estimates that this change alone will extend overtime protection to nearly five million white-collar workers within the first year of implementation.
In addition, the DOL proposes to increase the annual compensation requirement for the highly compensated employees exemption from $100,000 to $122,140 annually. Finally, the DOL proposes to establish a mechanism for automatically updating these compensation levels going forward to avoid the thresholds from becoming outdated as time passes between rule making.
The DOL encourages comments to these proposals be submitted on the Notice of Proposed Rulemaking (NPRM) web site. The DOL Wage and Hour Division web site contains additional information on how to provide comments, information on the deadlines for submitting comments and the procedures for submitting comments.
— Shannon Hamilton is with Stites & Harbison.
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