US Dept of Labor Issuing new Rules for Salary Exemptions
Below is a release from the US Department of Labor. Many states take their labor rules directly from the US DOL but many others have their own rules under which employees are eligible for overtime pay. For instance in California, a salaried person must be paid twice the minimum wage and be in a largely administrative position not doing the same work as the hourly employees. They must exercise independent thought and actions and this is a pretty high standard to be exempt from overtime requirements. Further, if you have salaried people, you better have a written agreement of what the salary covers as far as expected hours of work each day\week and if there is any overtime figured into the salary. Otherwise, it is not considered as covering overtime due. Check with your own state for their rules on overtime, but here is the statement from the US Department of Labor:
Wage and Hour Division (WHD)
Notice of Proposed Rulemaking: Overtime
Today the Department of Labor has announced a proposed rule that would extend overtime protections to nearly 5 million white collar workers within the first year of its implementation. Failure to update the overtime regulations has left an exception to overtime eligibility originally meant for highly-compensated executive, administrative, and professional employees now applying to workers earning as little as $23,660 a year. For example, a convenience store manager, fast food assistant manager, or some office workers may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay. Today’s proposed regulation is a critical first step toward ensuring that hard-working Americans are compensated fairly and have a chance to get ahead.
On March 13, 2014, President Obama signed a Presidential Memorandum directing the Department to update the regulations defining which white collar workers are protected by the FLSA’s minimum wage and overtime standards. Consistent with the President’s goal of ensuring workers are paid a fair day’s pay for a fair day’s work, the memorandum instructed the Department to look for ways to modernize and simplify the regulations while ensuring that the FLSA’s intended overtime protections are fully implemented.
Following issuance of the memorandum, the Department embarked on an extensive outreach program, conducting listening sessions in Washington, DC, and several other locations, as well as by conference call. The listening sessions were attended by a wide range of stakeholders: employees, employers, business associations, non-profit organizations, employee advocates, unions, state and local government representatives, tribal representatives, and small businesses. In these sessions the Department asked stakeholders to address, among other issues: (1) What is the appropriate salary level for exemption; (2) what, if any, changes should be made to the duties tests; and (3) how the regulations could be simplified. The Department’s extensive outreach helped in shaping a proposed rule that is intended to be responsive to concerns raised by the regulated community.
The Notice of Proposed Rulemaking (NPRM) was published on July 6, 2015, in the Federal Register (80 FR 38515) and invited interested parties to submit written comments on the proposed rule at www.regulations.gov by September 4, 2015. Only comments received during the comment period identified in the Federal Register published version of the NPRM will be considered part of the rulemaking record.
Written comments received during the comment period will be helpful in shaping any final rule. Based on past experience and extensive work with the regulated community on other FLSA-related matters, we believe a 60-day comment period provides sufficient time for interested parties to submit substantial comment. Equally important, a comment period of this length, coupled with the feedback already received during the initial outreach sessions, will meet the goal described above of ensuring the Department has the level of insight from the public needed to produce a quality regulation. For these reasons we will not be extending the comment period.
Additional Information
- Notice of Proposed Rulemaking
- Overtime Resources
- Fact Sheet: Middle Class Economics Rewarding Hard Work by Restoring Overtime Pay
- A Hard Day’s Work Deserves a Fair Day’s Pay (Huffington Post)
- Frequently Asked Questions (PDF)
- Fact Sheet on Proposed Rule (PDF)
- Blog Post: 5 Million Reasons Why We’re Updating Overtime Protections
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