The Department of Labor (DOL) issued a new proposed rule on March 7 that would modify the exemptions to the Fair Labor Standards Act (FLSA) overtime rules for certain white collar employees (executive, administrative, professional, and computing positions) and highly compensated employees.
This is the DOL’s second attempt to change the overtime rules in recent years. As you may recall, the Obama Administration issued final rules on the same subject that were set to go into effect on December 1, 2016 and that, among other things, would more than double the minimum salary required for employees to qualify under the white collar exemptions. Then, just a few days before the rules were to go into effect, a federal district court judge issued a nationwide injunction preventing the rule from going into effect on the grounds the scope of the new rule exceeded the DOL’s authority. The Obama Administration appealed the decision but then President Trump was sworn into office before the DOL’s argument on appeal was presented. The Trump Administration chose not to defend the Obama-era overtime rules but instead limited their argument to asserting that the DOL did have the authority to issue such rules. The Trump DOL then went back to the drawing board and issued a Request for Information in the summer of 2017, seeking comments in preparation for a new rule. The proposed rules are the product of this effort.
Similar to the Obama-era efforts, the new Proposed Rule present changes to the regulations that govern how employers can structure their relationship with their employees, which in turn can impact a business’s bottom line. In general, the FLSA requires employees be paid one and a half times their regular rate of pay for all hours worked over forty hours in a given workweek. Under the FLSA, there are, however, certain exemptions. Employees who fall under one of these exemptions do not have to be paid overtime.
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