As the end of 60 day period for public comment on the proposed revisions to the U.S. Department of Labor's ("DOL") overtime rule approaches, the controversy regarding an increase in overtime pay wages on. According to the regulations.gov website, more than 150,000 comments about this legislation have been submitted.
Currently, to be eligible for executive, administrative, and professional exemptions under the Fair Labor Standards Act ("FLSA"), the following criteria must be met:
- The employee must be paid on a salary basis;
- The salary level must be at least $455 per week ($23,660 per year); and
- The employee must meet duties tests specific to the exemption in questions.
The proposed rule seeks to raise the minimum salary threshold to $970 per week, or $50,440 annually. Understandably, this regulation has been met with criticism based on the likelihood that it will raise labor costs as it is estimated that millions of workers will become eligible for overtime pay.
Employers in the retail and restaurant operations may face significant challenges as these industries often employ lower-level managers who earn less than $50,000 per year but are not paid overtime.
Due to the significant and wide-ranging impact of the regulation on the U.S. workforce, requests have been made to extend the deadline for public comment. However, the DOL has apparently rejected these requests. Therefore, employers should ensure that all comments are submitted by the deadline of September 4, 2015.
To submit comments, employers should visit the website www.regulations.gov.
In addition, employers should initiate audits of wage classifications to determine whether modifications must be taken if the regulation is implemented.
We will continue to monitor this proposed regulation.