Proposed Overtime Regulations Released July 1, 2015

July 1, 2015

On June 29, 2015 at 9:16 p.m. Barack Obama issued a statement which revealed his plan to “extend overtime protection to nearly 5 million workers in 2016, covering all salaried workers making up to about $50,400”.  This was the first official statement to reveal a new wage threshold for exempt employees.  The current wage threshold for exempt employees is $23,660 per year.   A day later on June 30, 2015, the Department of Labor issued a press release which disclosed that the new salary threshold would actually be “an estimated” $50,440/year or $970/week and be indexed for inflation.   These numbers appear subject to change somewhat as the proposed regulations try to equate the minimum salary for exempt employees to the 40th percentile of earnings for full-time salaried employees (for 2013 this was $921 per week, or $47,892 annually).  Based on this minimum salary calculation, the language of the proposed rules use the phrase “not less than $921” per week to set forth the new minimum wage threshold.  This is a significant change, both in the amount of the new exempt salary threshold and the fact that it will now be indexed for inflation for the first time since the Fair Labor Standards Act (FLSA) passed in 1938.

On July 1, 2015 the proposed regulations were made public as part of a 295 page document, subject to a 60 day public comment period.   According to a White House Fact Sheet, the proposed regulations do not change the “duties test” for exempt employees.  However, the Summary preceding the proposed regulations states that the Department of Labor is still considering  whether revisions to the duties test are necessary.  For further information on the current law, the proposed law and the process behind the change, please see the following link: July 1, 2015 overtime rule change.

 

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