DEPARTMENT OF LABOR’S NOTICE OF PROPOSED RULEMAKING: EXTENDING OVERTIME PROTECTIONS TO INCLUDE 5 MILLION WORKERS

June 30, 2015paperstreet

Today, June 30, 2015, the Department of Labor has announced a proposed rule that would extend overtime protections to nearly 5 million white collar workers within the first year of its implementation. Specifically, the Obama administration proposed requiring overtime pay for workers who earn nearly $1,000 per week, more than doubling the current threshold.

To keep up with future inflation and wage growth, the proposal will peg the salary threshold at the 40th percentile of income. With today’s long-awaited proposal, the Labor Department will raise the threshold to $970 a week — $50,440 a year — by 2016.

The Labor Department’s estimates suggest the proposal would raise wages for 5 million people, but other estimates are far higher. The Economic Policy Institute (“EPI”), a liberal think tank, recently estimated that a threshold of $984 a week would cover 15 million people.

Currently, salaried employees who are paid more than $455 a week — or $23,660 a year — can be exempted from overtime pay if their employer deems them to be “managers,” even if they have little in the way of supervisory duties. The overtime regulations have left an exception to overtime eligibility originally meant for highly-compensated executive, administrative, and professional employees now applying to workers earning as little as $23,660 a year. For example, a convenience store manager, fast food assistant manager, or some office workers may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay.

Under the current threshold of $455 per week, only about 8 percent of salaried workers are eligible for 1½ times their regular pay when they work more than 40 hours per week. The EPI estimates that doubling the salary level would make up to 40 percent of salaried workers eligible.

Obama’s proposal aims to narrow a loophole that the president has long said is exploited by some employers to avoid paying overtime. The White House’s proposed changes will be open for public comment and could take months to finalize. Of utmost importance is that these proposals can be enacted through regulation, without approval by the Republican-led Congress.
The “Take Away”

The current administration is sending a clear message that an expansion of overtime to include significantly more employees is imminent. Businesses may decide to simply pay the increased labor costs or hire additional workers to avoid paying overtime or extend the hours they give part-timers. Regardless, employers must be prepared. We can help you and your Clients plan accordingly. Call or email us today.

PROPOSED OVERTIME REGULATIONS AT OMB FOR REVIEW

June 19, 2015paperstreet

On May 5, 2015, the U.S. Department of Labor (DOL) sent proposed regulations to the Office of Management and Budget (OMB) for review before they are published for comment in the Federal Register. The proposed regulations are expected to overhaul the current “white-collar” regulations, which define the parameters for classifying employees as exempt from the minimum wage and overtime protections of the Fair Labor Standards Act (FLSA). While the proposed rules have not yet been made public, there is no doubt that the DOL has put forth changes that will significantly increase the number of employees who are entitled to overtime compensation when they work more than 40 hours in a workweek.

President Orders Revisions

The rule changes are being issued in response to a Memorandum released on March 13, 2014, in which President Barack Obama directed the secretary of labor to propose revisions to “modernize and streamline the existing overtime regulations.” (See link to Presidential Memorandum: https://www.whitehouse.gov/the-press-office/2014/03/13/presidential-memorandum-updatingand-modernizing-overtime-regulations). In his blog posting on May 5, 2015 Secretary of Labor Thomas Perez stated:

“The rules governing who is eligible for overtime have eroded over the years. As a result, millions of salaried workers have been left without the guarantee of time and a half pay for the extra hours they spend on the job and away from their families.

We’ve worked diligently over the last year to develop a proposed rule that answers the president’s directive and captures input from a diverse range of stakeholders. After extensive research, study and careful analysis, we have submitted the proposed rule to the [OMB] for review. In the near future, the public will have an opportunity to weigh in and help us craft a final rule.”

It is likely that the DOL will propose a substantial increase in the salary threshold for exempt status. Currently, in addition to performing exempt duties, an employee must be paid a salary of at least $455 per week ($23,600 per year) to be classified as exempt. The DOL will also likely propose to revise the “primary duty” test to make it more difficult for an employee with both exempt and nonexempt duties to qualify for an exemption.

Under the current regulations, an employee who supervises at least two other employees but also spends a majority of his time performing nonexempt duties may be properly classified as exempt as long as supervising other employees is the most important duty he performs. It is anticipated that the DOL will propose that to be considered exempt, an employee must spend more than 50 percent of his time performing exempt duties.

The “Take Away”

Publication of the proposed regulations is expected early this summer. The public will be afforded 60 to 90 days to submit comments before the DOL issues final regulations. In the meantime, employers should start planning for significant increases in the number of employees who will be entitled to overtime compensation. We can help you and your Clients plan accordingly. Call or email us today.

ROB HUDSON SELECTED AS 2015 FLORIDA LEGAL ELITE

June 15, 2015LawFirm

Rob Hudson was selected by his peers in the legal community for inclusion in Florida Trend magazine’s listing of Florida Legal Elite for 2015.   Of the more than 100,000 members of the Florida Bar, only 1,131 lawyers were selected for inclusion on this list in 2015.   Florida Trend magazine compiles this prestigious list by peer nominations and voting in addition to assessing an attorney’s history and track record.   Rob Hudson has been chosen for inclusion in this list for four consecutive years.

ROB HUDSON SELECTED AS A FINALIST FOR THE 2015 LEADERS IN LAW AWARD

June 11, 2015paperstreet

Rob Hudson was selected as one of five finalists for the 2015 Leaders in Law Award in the field of Labor and Employment Law by South Florida Business and Wealth magazine.  The Leaders in Law Awards is a unique awards program created by Lifestyle Media Group to honor the lawyers, law firms, and corporate counsel that promote excellence in law, maintain the highest level of ethics, show a commitment to their community and are proven leaders.