Anticipated Changes to the White Collar Overtime Exemption Under the FLSA: What Employers Need to Know

Transcription

1 Anticipated Changes to the White Collar Overtime Exemption Under the FLSA: What Employers Need to Know Presented by: Maggie S. Hanrahan (Charlotte and Atlanta). ogletreedeakins.com

2 Obama Administration s Initiative to Update Overtime Regulations March 13, 2014 Administration s Memorandum to Labor Secretary Directive to propose revisions to modernize and streamline the existing overtime regulations Update existing protections Address the changing nature of the workplace Simplify the regulations Memorandum did not create new overtime rules 2

3 Obama Administration s Initiative to Update Overtime Regulations White House reports that 88% of salaried workers do not get overtime because they make more than the cap of $455/week ($24,000/year) Just over 11% of salaried workers fall under the salary threshold, compared with 65% in 1975 Salary cap has not kept up with inflation In 1975, it was $250/week That is the equivalent to roughly $1,000 today more than 2x the current cap 3

4 Obama Administration s Initiative to Update Overtime Regulations Notice & Comment Regulatory Process Administrative Procedure Act: Publication of Proposed Rule Public Comment Period Comment Review & Preparation of Final Rule Office of Management & Budget Review Publication of Final Rule 4

5 Obama Administration s Initiative to Update Overtime Regulations May 5, 2015: US Department of Labor reportedly sends draft proposed regulations to the Office of Information and Regulatory Affairs of OMB today. Proposal still not public. OIRA s review may take a few weeks.

6 Anticipated Regulatory Provisions to Revise Salary Tests Increase current threshold of $455 per week Reports speculate that salary basis will be raised to between $42,000 and $51,000 a year. Secretarial push for $56,000/year. Difference between these two figures alone is vast higher threshold would make an additional 2.6 million workers eligible for overtime 6

7 Anticipated Regulatory Provisions to Revise Primary Duties Tests Replace current definitions and factors Reinstitute percentage-based duties test (similar to CA) Narrow the administrative, computer and executive exemptions

8 Quantitative Tests Employee must be primarily engaged in exempt duties to be exempt Primarily means more than one-half of employee s work time Major issues do you count: Time for duties actually performed? Time for realistic requirements of the job? Time for directly + closely related duties? 8

9 Targeted Positions and Industries Hospitality/restaurant management Financial services industry Retail (middle-management positions) Computer technicians Others in the executive or professional classification 9

10 Obama Administration s Initiative to Update Overtime Regulation Actions Employers Can Take Now Develop a strategy to provide effective and substantive comments to proposed regulations Be compliant with current overtime regulations Audit existing classifications Evaluate jobs likely to be impacted by new regulations 10

11 Other Considerations and Impact Strategies for reclassification Perez decision Wage and Hour Division s increased funding and audits Class/collective action litigation Class action waivers

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13 Thank You Maggie S. Hanrahan Ogletree Deakins, Nash, Smoak & Stewart, P.C. 191 Peachtree Street, N.E. Suite 4800 Atlanta, GA Phone: (404)

14 Anticipated Changes to the White Collar Overtime Exemption Under the FLSA: What Employers Need to Know Presented by: Maggie S. Hanrahan (Charlotte and Atlanta). ogletreedeakins.com