New Overtime Rules will Reclassify Many Exempt Employees

Yesterday, the DOL and President Obama announced sweeping changes to the FLSA exemptions from overtime.  Generally, under current law, an employee may be exempt from overtime if the employee meets the duties test for the administrative or executive exemption and makes a salary of at least $455 per week ($23,660 annually).  The proposed rule would increase the minimum salary for exemptions to $970 per week ($50,440 annually).  That means that employees who earn less than $970 per week, regardless of their duties, will be entitled to overtime if they work more than 40 hours per week. It also means that, in anticipation of the final issuance of the new DOL regulations (expected in 2016), employers need to take a close look at how their management/supervisory employees are currently classified and make some preliminary decisions to re-classify exempt employees as non-exempt.

We will continue to follow developments of the new rules.

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