Overtime Legislation Proposed

Legislation has been introduced to comply with the Obama Administration’s Executive Order that the Department of Labor “modernize and streamline” the Agency’s “white collar” overtime exemption regulations governing the scope of executive, administrative, professional, outside sales and computer exemptions under the Fair Labor Standards Act (FLSA). Restoring Overtime Pay for Working Americans Act (S.2486).

The following are the highlights of the proposed legislation:

Increase from $100,000 to $225,000 the minimum annual salary that would exempt highly-compensated employees from overtime eligibility.

The Bill would revise the “primary duty” test used to evaluate whether a worker’s duties are governed by the FLSA overtime exemptions.

• It would require that employees not spend more than 50% of weekly work hours performing duties that are not governed by such exemptions.

While these modifications are not yet law, they will revise federal law applicable to overtime compensation eligibility. Currently, they are advisory only to allow employers to ready themselves for the changes.

Source: Ronal Souza, Lynch, Gilardi & Grummer

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