New Proposed Regulations for Overtime Exemptions

In March 2014, President Obama directed the Department of Labor to reexamine the efficacy of the current regulations interpreting the Fair Labor Standards Act (FLSA) and to “modernize and streamline” the government’s interpretation of this law. That is to say, the President asked the DOL to make it harder for employees to avoid paying overtime to employees whom they classify as exempt.

The agency has recently released its agenda for 2015 and on the regulatory agenda for February is issuance of proposed regulations revising the government’s current interpretation of the criteria businesses must apply in classifying employees as exempt from overtime compensation.  As there has been no regulatory movement in this area since 2004, I believe we can safely anticipate the DOL proposing a noticeable overhaul in how employers classify employees on these wage and hour issues; with the expectation being that it will likely become harder for employers to classify employees as exempt. (My guess is that the classification of working supervisors as exempt will receive particular attention.)

Anticipated for February 2015, however, are only proposed rules. The government will still need to offer interested parties an opportunity to comment on the proposals, hold hearings, and consider the comments from the public before they issue final regulations. Anticipate the process being completed, however, by January 2017.

Thompson Coe and myHRgenius Tip of the Week is not intended as a solicitation, does not constitute legal advice, and does not establish an attorney-client relationship.