Five Million More White Collar Workers Covered By Overtime Laws

In July, the Department of Labor announced rules that would extend the labor protections provided for in the Fair Labor Standards Act to an additional roughly 5 million white collar workers.

As it currently stands, salaried workers earning at least $455 per week – which is the equivalent of $23,600 on a yearly basis – are exempt from the Fair Labor Standards Act’s protections.  Thus, employers do not have to compensate any such employees for overtime worked.  The new proposed regulations would more than double that threshold to $921 per week, or $47,892 annually.

This rule was proposed in keeping with President Obama’s March 13, 2014 Presidential Memorandum, in which he directed the Department of Labor to modernize the FLSA’s protections in accordance with the realities of today’s economy and workplace.  The white collar employee exemption in the FLSA was based on the notion that these workers earned salaries far exceeding the minimum wage, and were generally entitled to other employee benefits and job security, differentiating them from those employees protected under that law.   Since 1940, the salary threshold for this exemption has been increased seven times, most recently in 2004.  This new proposal would set that threshold at the 40th percentile of weekly earnings for full-time salaried workers.  The full text of the proposed rule can be found here.

The proposed rule has not yet been finalized and implemented.  Interested parties were given through September 4 to submit written comments.  The final version should be published in the near future.

At Tittle & Perlmuter, we investigate and prosecute individual and class claims on behalf of employees whose federally protected rights to fair wages and benefits have been violated.  If you have a question as to whether or not your employer has properly classified or compensated you, call us for a free consultation.

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