On March 13, 2014, President Obama signed a memorandum asking the United States Department of Labor (“DOL”) to update and modernize its overtime regulations. The memorandum specifically targets for revision DOL’s regulations on executive, administrative, and professional exemptions to overtime pay.
Under the Fair Labor Standards Act (“FLSA”), certain categories of employees are exempt from overtime pay. President Obama has taken the position, however, that the regulations implementing these exemptions have fallen out of step with the modern economy. Citing an improving economy but stagnant wages for “the average family,” President Obama directed DOL to propose revisions to modernize and streamline existing overtime regulations. Specifically, President Obama directed DOL to consider (1) how the regulations could be revised to update existing protections consistent with the intent of the FLSA, (2) how to address the changing nature of the workplace, and (3) how to simplify the regulations to make them easier for workers and businesses to understand and apply.
The memorandum places particular emphasis on the “white collar” exemptions for executive, administrative, and professional employees. In his remarks on the memorandum, President Obama stated that, although the exemptions were originally meant to cover highly-paid employees, they have been used to exempt employees paid as little as $23,600 per year. This statement, as well as a fact sheet recently released from the White House, indicates a desire to increase the federal $455.00 weekly pay threshold that employees must meet to qualify for these exemptions.
President Obama recognized that his proposed changes to the FLSA regulations would not win universal support. He did promise, however, to seek input from both employees and employers as the revisions are considered. Make sure to check this blog frequently for updates as we continue to track these proposed revisions.