Under the Fair Labor Standards Act (FLSA), employees who are “exempt” are not eligible for overtime payments. Employers are not required to pay overtime to an exempt employee, regardless of the number of hours the employee works. Numerous categories of exempt employees exist, but three of the primary categories include employees in professional, executive, or administrative roles.
Under current FLSA regulations, an employee need make only a salary of $23,660 per year ($455 per week) to be eligible for exempt status under the professional, executive, or administrative categories.
This week, the Department of Labor proposed new regulations that would more than double this minimum salary requirement to $50,440 per year ($970 per week), thus radically decreasing the number of employees who would qualify to be exempt from overtime. The actual changes may be months away, and will not be implemented until the conclusion of a “comments” period. However, employers should pay careful attention to these proposed changes because they may necessitate a significant change in overtime policies and payments.