Last March, President Obama mandated that the Department of Labor (DOL) update the Fair Labor Standards Act (FLSA) “white collar” exemptions which will eventually result in overtime eligibility for some salaried employees formerly considered exempt from overtime eligibility. The changes in the FLSA “white collar” exemption rules will significantly affect employers as millions of employees have the potential of being reclassified from non-exempt to exempt and overtime eligible for every hour worked beyond their 40-hour workweek.
Most employers are keenly aware of the fact that based on the current law that they are required to pay their non-exempt or overtime eligible employees 1.5 times their hourly wage for any hour worked beyond 40 hours. White collar employees who fall in the executive, administrative or professional category are exempted from overtime pay because they are classified as management.
The white collar exemption currently on the books has not been changed in decades. It is sometimes viewed as restrictive at best by both employees and supporters alike because of the belief that there are many jobs that are currently employer-classified as white collar, but based on the actual work being performed, these roles in reality are actually overtime eligible jobs.
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Case in point: There are industries where employees are classified as supervisors yet these supervisors are responsible for completing the same tasks as the employees that they manage; yet they are not eligible to be paid overtime. Organizations with employees such as these stand to be impacted greatly from the pending changes.
It is not clear when changes will be implemented so employers need to continue monitor this particular initiative with the Department of Labor.
Dianne Shaddock
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