Proposed Overtime Exemption Regulations are Imminent

The Department of Labor (DOL) sent its overtime regulations to the Office of Information and Regulatory Affairs (OIRA) for review on March 14.  OIRA is the branch of the Office of Management and Budget that is the final way station prior to issuance of the regulations.   This means that although publication of the final rules had been scheduled for July of this year, a publication date in April or May is now more likely.

The final regulations will revise the requirements for employees to be deemed exempt from the overtime requirements of the Fair Labor Standards Act (FLSA). Last year, DOL proposed to revise the salary threshold for the so-called ?white-collar exemptions? from $23,660/year to the 40th percentile of salaries in the United States?a figure estimated to be approximately $51,000/year. If the final regulations adopt that proposal, this would mean that employees who are currently classified as exempt, but who earn less than $51,000/year, would no longer be exempt, and employers would be required to pay overtime compensation to such employees whenever they worked more than 40 hours in a workweek.

The final regulations may also change the ?primary duty? test. Under the current regulations, an employee may be exempt even if he or she spends less than 50% of his or her time performing exempt duties, so long as the employee?s primary duty or duties are exempt duties. In the final regulations, however, DOL may adopt the test currently applied in California, where an employee must spend more than 50% of his or her time performing exempt duties in order to be deemed exempt.

 Stay tuned. We will keep you apprised of further developments.