For now, the overtime rule will not take effect as planned on December 1st, but it could still be implemented later down the road. Employers may continue to follow the existing overtime regulations until a decision is reached. A preliminary injunction isn’t permanent, as it simply preserves the existing overtime rule – which was last updated in 2004 – until the court has a chance to review the merits of the case objecting to the revisions to the regulation.
But, I’m getting ahead of myself for now….let’s talk a look at what the FLSA (Fair Labor Standards Act) has done to protect the integrity of ‘overtime’ since 2004 and then we can look at what the DOL proposed for going forward.
Most employees covered by the FLSA must be paid at least one and one-half times their regular rate of pay for any hours they work beyond 40 in a workweek. An employer who requires or ‘permits’ (optimal word here) an employee to work overtime is generally required to pay the employee premium pay for such overtime work. The FLSA establishes minimum wage, overtime pay, record keeping and youth employment standards affecting employees in the private sector and in Federal, State and local governments. Covered non-exempt workers are entitled to a minimum wage of not less than $7.25 per hour. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.
Generally, this affects employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more. In addition, employees of certain businesses are covered by the FLSA regardless of the amount of gross volume of sales or business done. These businesses include: hospitals, businesses providing medical or nursing care for residents; schools (whether operated for profit or not for profit); and public agencies.
The FLSA’s white collar exemptions exclude certain executive, administrative and professional employees from federal minimum wage and overtime requirements. Certain computer professionals and outside sales employees are excluded from these requirements. Currently, to qualify for exemption, a white collar employee generally must:
***Be salaried, meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the ‘salary basis test’);
***Be paid at least a specific salary threshold, which is $455 per week (the equivalent of $23, 660 annually for a full-year employee) in existing regulations (the ‘salary level test’) and;
***Primarily perform executive, administrative or professional duties, as provided in the Department’s regulations (the ‘duties test’).