The Fair Labor Standards Act is the federal law which sets minimum wage and requirements for employers to pay overtime to workers. The law also establishes rules under which employees may be exempt from the overtime requirements. On March 7, 2019, the United States Department of Labor proposed a rule which would alter the current rules for exempt employees. Today’s Long Island employment law blog discusses the proposal.
Under the FLSA, employers must pay overtime to employees who work more than 40 hours in a workweek. Overtime must be 1.5 times the employee’s regular rate of pay.
But, some employees are exempt from this requirement. To be exempt, the employee must receive a minimum weekly salary and the employee’s job responsibilities must meet the definition of one of the law’s exemptions. In 2004, the Department of Labor set the salary requirement to $455 per week, and that amount has remained unchanged since then.
The new rule would increase the minimum salary level under the FLSA to $679 per week, which equates to approximately $35,308 per year. The Department of Labor estimates that an additional one million workers will become eligible for overtime.
The rule will not change overtime rules of nurses, police officers, firefighters, paramedics, laborers, and non-management employees in certain maintenance and construction occupations.
The rule will also not make changes to the duties tests, the second part of the inquiry after determining the employee’s minimum salary. Under the duties test, employees may be exempt if they work in administrative, executive, or professional positions.
Under the administrative exemption, the employee’s duties must be non-manual, must relate to the management or business operations of the employer, and must include the exercise of discretion of independent judgment. Under the executive exemption, the employee’s duties must relate to managing the enterprise (or a subdivision of it), direct the work of at least two subordinates, and must have authority to hire and fire employees (or make those recommendations). For the professional exemption, the employee must perform work which requires advanced knowledge in a field of science or learning and the knowledge must have been acquired in course of instruction.
These exemptions are not all inclusive and employers classifying employees as exempt or non-exempt should consult with an experienced and knowledgeable employment law attorney. Mistakes in classifying employees can result in crippling wage and overtime lawsuits.
The proposed DOL minimum salary rule may have significant impacts on employers and employees. Employers who want to avoid overtime requirements will have to review their employees’ salaries and raise them to align with the new rules. If current exempt employees’ salaries are not raised, employers must pay overtime or risk incurring damaging FLSA overtime violations.
Employees who believe they have not been classified properly or are not receiving lawful overtime pay, should consult with an experienced overtime pay lawyer on Long Island. Overtime lawsuits can help recover unpaid overtime for employees.
If you have questions about the DOL’s proposed minimum salary rule, overtime, or employee classification concerning exempt or non-exempt status, contact an experienced wage and overtime lawyer at Famighetti & Weinick PLLC. Our employment attorneys are available at 631-352-0050. Our website with more information is at http://linycemploymentlaw.com.