Department Of Labor Likely To Amend Salary Exemption

According to CNN, the Obama administration is making progress towards issuing its proposed amendment to the overtime compensation laws. This amendment aims to provide overtime pay to low-salaried managers who currently do not qualify for it.

Under the Fair Labor Standards Act (FLSA), most “non-exempt” workers are entitled to receive overtime pay at one and a half times their regular rate of pay for any hours worked beyond 40 in a workweek. However, “exempt” workers are not eligible for overtime compensation, regardless of the number of hours they work.

The proposed changes focus on modifying the “salary” basis test, which currently allows companies to avoid paying overtime to full-time workers earning as little as $455 per week, or $23,660 annually, by categorizing them as “exempt” and paying them as salaried employees rather than hourly. The salary threshold was originally established to exempt high-level executives from receiving overtime pay, but it has not kept pace with inflation. Consequently, many lower-level managers, sales employees, and administrators earning low salaries are being denied overtime pay to which they argue they are entitled. Policy experts anticipate that the Department of Labor will likely raise this threshold to a range of $42,000 to $52,000.

For more information about exemptions and whether you qualify for overtime compensation, please reach out to the experienced wage and hour lawyers at Buckley Bala Wilson Mew LLP in Atlanta for an immediate and confidential case evaluation.