Articles

Employer Alert: Department of Labor to Revise Federal Overtime Regulations

June 30, 2015

by Christine H. Long

The U.S. Department of Labor (DOL) has proposed a new rule that would broaden federal overtime pay regulations including raising the minimum salary threshold required to qualify for the Fair Labor Standards Act's (FLSA) "white collar" exemption to $50,440 per year starting in 2016. The last update was over a decade ago, and clearly the Federal Government is following the lead of states like California in raising the minimum wage. The proposal is expected to be published in the Federal Register in the next few days, triggering a 60-day comment period.  The DOL has also proposed to automatically update that salary threshold in order to prevent it from becoming outdated as time passes between rulemakings.

Under current regulations, employees have to meet certain job duties-related tests and be paid at least $455 per week — or $23,660 annually (under Federal law) — on a salary basis in order to be exempt from minimum wage and overtime requirements under the FLSA exemption for executive, administrative, professional, outside sales, and computer employees. The salary exemption is higher in California and is based on the State (not local) minimum wage laws, requiring a series of tests to be met, as well as an employee receiving a base salary of no less than double the state minimum wage.

The proposed regulations include changes to the duties tests applicable to the white collar exemptions. The proposal listed five issues the agency was seeking input on, including what if any changes ought to be made to the tests and whether the DOL should look to California — where a worker has to spend at least 50 percent of their time on exempt duties to qualify for an exemption — as a model.

If you have questions about whether your current pay practice complies with California’s stricter requirements, please contact one of Berliner Cohen’s employment attorneys.

Christine H. Long, (408) 286-5800, christine.long@berliner.com

Susan E. Bishop, (408) 286-5800, susan.bishop@berliner.com

Eileen P. Kennedy, (408) 286-5800,  eileen.kennedy@berliner.com

Kara L. Arguello, (408) 286-5800, kara.arguello@berliner.com

Jennifer Y. Leung, (408) 286-5800, jennifer.leung@berliner.com

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