Overtime Exempt Status is Changing

The United States Department of Labor has issued a proposed regulation on the requirements for an exemption to the overtime pay rules under the Fair Labor Standards Act.  Under FLSA regulations, certain positions are exempt from overtime pay (time and one-half rate for over 40 hours) if the position is considered an executive position, an administrative position or a professional position.  There are a number of requirements in order to meet one of these exemptions; however, one of the principal requirements is that the employee in the position be paid a certain amount of salary on an annual basis.

The new salary amount that must be paid to the employee in order to meet the exemption is proposed to be an annual compensation of $35,308 (or $679 per week).  Employers must review their annual salary payments to exempt employees and possibly adjust the salary to ensure continuation of the exempt status under this rule.