The Ever-Changing Workplace

Everyone is anxiously awaiting the release of the new Department of Labor changes to overtime exemptions.  President Obama announced last spring that he wanted to make some changes and update the current FLSA regulations.  Since that time, employers, attorneys, and others have been eagerly awaiting these modifications.  It is clear that the changes will greatly affect employers in the classification of many employees can be considered exempt.  The questions that remains is exactly how many employees will need to be reclassified and how will this affect businesses?

The DOL originally scheduled the proposed regulations release for November of 2014, but then, the Department delayed that date.  The release was then slated for February 2015. With only two days remaining, many are wondering if another delay may be announced.   The good news for employers is that even when the proposed rule is announced, it will go through the federal rulemaking process which would delay the implementation of any new regulation for at least a few more months.  This would allow employers to finalize a plan on how to address the change.

Employers should continue to follow these pending regulatory changes and begin work on a plan of action for when the final changes are released.  Since the exact changes are still up in the air, businesses should, at a minimum, consider how they will react to a substantial jump in pay requirements. Currently, employees who are paid at least $455 a week on a salary basis are exempt from the FLSA mandatory overtime requirements.  Some interested parties and labor groups say that baseline amount should be increased to $750 a week or even as much as $1,000 a week.   Some states, such as California, already have higher weekly minimum salary requirements.  California’s requirement is currently $640 a week and is set to increase to $800 in 2016.

For now, employers wait to find out what the ultimate changes will be and how these modifications will impact business.  If the release of a proposed rule gets further delayed, it could be Fall before employers will have the ability to start answering that question.  Like many economic changes, the true impact of these changes could take years to play out.

Nicole Crump, JD, CIC
Director of Employment ADR
EDR Systems

This information is the opinion of the writer and is not meant to be construed as creating an attorney-client relationship or as legal advice to an individual or business. Please consult your attorney if you need legal advice on the issues above.