US DOL Proposes Drastic Changes to Overtime Laws

In a year of minimum wage controversy and fast food strikes, President Obama and the U.S. Department of Labor are throwing a new policy at the economy.

On Monday July 6, 2015, the U.S. Department of Labor published proposed changes to the Fair Labor Standards Act, specifically the “white collar” exemption to overtime requirements. The new policy proposes that the salary test be increased from $455 per week ($23,660 per year) to $970 per week ($50,440 per year). The change is expected to impact approximately five million workers and increase overtime eligibility from 8% to 40% of the American workforce.

The proposed revisions also would tie the salary test for all overtime exemptions to annual changes in inflation and wage growth. This would be a significant change for employers, as it would require them to annually review their classification of exempt employees to ensure they continue to meet the salary test.

The proposed rule changes are open for public comment until September 4, 2015 and the rule is expected to become effective in early 2016.

As a leader in the community and a full service law firm distinguished by its tenacious approach to business litigation and corporate law, Campbell Guin will follow this proposed change closely. If these changes are implemented, they will impact a great many employers. Business owners should begin taking proactive steps to protect themselves now. If you have any questions or concerns about how this might impact you and your business, please call Hannah Lansdon at (205) 633-0279 or Bert Guy at (205) 633-0206.