The Law @ Work

President Obama to Direct Labor Department to Expand Overtime Pay

by Amelia J. Holstrom

On Thursday, President Obama reportedly will use his executive authority and direct the United States Department of Labor to issue new regulations under the Fair Labor Standards Act that will require overtime pay for millions of employees currently classified as exempt.  Under the current regulations, employees who fit in the executive, professional, or administrative exemption (commonly referred to as the white-collar exemptions) as defined by the regulations are not entitled to overtime pay so long as they earn at least $455.00 per week in salary.  The $455.00 per week rate was set in 2004.  Currently, employers who do not pay salaried employees at least $455.00 per week must pay them overtime for any hours they work over 40 hours per week.

According to sources, President Obama will seek to increase the $455.00 per week salary minimum to a higher number.  Some sources have suggested numbers as high as $1,000.00 per week.  No matter what the increase is, it will impact employers throughout Massachusetts and the other 49 states.  Any increase in the weekly salary minimum requirement will require employers to either give salaried employees receiving less than that amount per week a raise to meet the new requirement or to pay overtime to salaried employees who work more than 40 hours per week and do not earn the minimum weekly salary as stated in the regulations.

The bottom line for employers is that the regulations may require you to pay your salaried employees more than you already are.  Before any proposed regulation can go into effect, it is subject to public comment before it can be finalized by the Department of Labor.

Share this