President Obama’s announcement last week that he was ordering the Labor Department to revise the regulations concerning who can be classified as “executive or professional” employees has created a buzz about what this will mean for both employers and employees. The fact that the President specifically identified concerns about managers in the fast-food industry suggests that the Department of Labor will be looking for ways to change how employees in the hospitality industry are classified.
However, there have been very few details about what any of this will actually mean for employers. The President trumpeted the request to review the regulations as a way to help make sure “millions of workers are paid a fair wage for a hard day's work.” But, the President’s memorandum simply instructed the Department of Labor “to update regulations regarding who qualifies for overtime protection. In so doing, the Secretary shall consider how the regulations could be revised to:
- Update existing protections in keeping with the intention of the Fair Labor Standards Act.
- Address the changing nature of the American workplace.
- Simplify the overtime rules to make them easier for both workers and businesses to understand and apply.”
Not much detail there.
The Secretary of Labor’s press release referred generally to the low salary threshold of $455 per week, but did not give any other specific details as what to expect other than to say that it “will give millions more people a fair shot at getting ahead.”
Whether the President’s directive will lead to any real changes is anyone’s guess. (For a discussion by our colleague, Mike Kun, suggesting that there may be no real impact, see his blog entry.) However, the rhetoric surrounding the announcement suggests that the new regulations could impact “millions” of employees. If that is the case, employers must be very careful to stay informed of those changes and make the necessary adjustments. Plaintiffs’ lawyers will undoubtedly be studying the changes carefully to look for a way to bring claims on behalf of the “millions” of employees who will supposedly be affected.