The U.S. Department of Labor has amended the Fair Labor Standards Act (FLSA) “white collar” exemptions, which exclude certain “executive, administrative and professional” employees from overtime protections. The Obama administration announced today that the new FLSA overtime regulations raise the salary threshold to $47,476 per year. If employers do not pay workers at least that amount per year, the workers will be entitled to time-and-one-half overtime pay regardless of how their employers characterize their job duties. The new salary threshold means that an estimated five million additional workers will be covered by the FLSA’s overtime protections.
Overtime protections have eroded over the years because the salary threshold, amended just once in the last 40 years, is not tied to inflation. As a result, employers have been able to misclassify millions of workers making as little as $23,660 a year and deny them overtime compensation no matter how many hours they work. The new threshold, provides a bright-line rule that will make it more difficult for companies to violate the law and easier for the Department of Labor, non-profits, and private workers’ rights law firms to recover lost wages for victims of wage theft.
Outten & Golden partner Justin M. Swartz said, “Systemic misclassification of workers as exempt from the FLSA’s overtime protections has been a serious workplace problem for decades. Too many workers have worked long hours, giving up valuable time with their families, without earning any overtime pay. The new rules will be a useful tool for law firms like ours to help ensure that workers are be fairly paid for the roles they play in increasing corporate profits.”
Outten & Golden partner Rachel Bien said, “In the long term, this overtime change will eliminate costly, time-consuming disputes and litigation. In the near term, it will clarify the process of classifying workers for employers. It will be much easier for employers to determine who is exempt from overtime pay and who should be paid those wages.”
In March 2014, President Obama called for the Department of Labor to update and modernize the overtime regulations, saying that the overtime rules are “outdated” and “have not kept up with our modern economy.”
About Outten & Golden LLP
With offices in New York, Chicago, and San Francisco, attorneys in Outten & Golden’s Class & Collective Action Practice Group have represented tens of thousands of workers in FLSA overtime and minimum wage lawsuits. The firm represents workers whose employers have violated federal, state and local laws governing minimum wage, overtime, misclassification, exemptions, tips, commissions, prevailing wages, and other types of pay issues. More information is available at www.outtengolden.com.
Contacts: Justin M. Swartz and Rachel Bien, Outten & Golden LLP, (212) 245-1000.