The U.S. Department of Labor issued Proposed Rules that would change the overtime requirements under the Fair Labor Standards Act (FLSA). The FLSA sets minimum wage, overtime pay, recordkeeping and youth employment rules for employers.
The FLSA overtime provisions require that employees covered by the FLSA must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half of their regular rate of pay. Certain employees may be treated as “exempt” from the overtime pay requirements.
White collar workers are considered exempt from the overtime pay requirements. Previously, an employee could be considered a white collar worker if he or she received an annual salary of at least $23,660 ($445 per week) with special rules for computer professionals. The new Proposed Rules change the monetary exemptions for white collar workers as follows:
- The standard salary level is the 40th percentile of weekly earnings for full-time salaried workers (projected to be $50,440 annually);
- Highly compensated employees are those who have an annual compensation level at the 90th percentile of weekly earnings for full-time salaried workers ($122,148 annually); and
- Salary and compensation levels will be adjusted each year.
The proposed rules do not change the current duties tests for determining if an employee is performing white collar duties.
The Department of Labor has requested comments on the rules, and suggested that changes may be made before the rules are finalized.
