In 2014, President Obama directed the Secretary of Labor to streamline existing overtime regulations for the “white-collar” exemptions. These exemptions from overtime, which cover the typical executive, administrative and professional employees, were last revised in 2004. When the revisions became effective in 2004, there were significant changes in the application of the exemptions for many employers. It remains to be seen whether these proposed changes will have as sweeping an impact across industry.
In 2014, there was quite a bit of discussion by proponents of change to increase the minimum salary required to be exempt. Some commentators pointed to examples of entry-level management employees who, by and large did the same tasks as their subordinates, but were not entitled to any overtime compensation. This can result in subordinate employees working fewer hours or making more money once the overtime premiums were factored in.
Last fall, the Department of Labor stated that it would delay the publication the proposed final regulations until February 2015. The month is quickly coming to a close and the Department of Labor has yet to publish these proposed new regulations. Of course there will be a comment period prior to final implementation. If it is similar to the 2004 changes, there will be some tweaks from the first version published to the final version that is actually implemented in the Code of Federal Regulations. The Wage & Hour Defense Institute will be closely monitoring the Department of Labor and its proposed rules once they are published for the benefit of its members and their clients. But, suffice to say that all employers should take note of the changes to ensure compliance, especially those with executive employees.