Labor Department regulations to expand overtime pay for millions

Q&A with Charlie Plumb

published in The Oklahoman | May 19, 2016

On May 17, 2016, the U.S. Department of Labor issued wage and hour regulations that will extend overtime pay to millions of workers who were previously classified as exempt under the Fair Labor Standards Act’s executive, administrative and professional exemptions. Labor and employment attorney Charlie Plumb was interviewed about these changes to federal law and how they will impact employers.

Currently, certain employees who earn a minimum salary of $455 per week (or $23,660 annually) and whose duties qualify them for the FLSA’s “white-collar exemption” are not eligible for overtime, said Plumb. Beginning December 1, that minimum salary threshold more than doubles – to $913 per week (or $47,476 annually). At that time, workers who earn less than the new minimum will be eligible for overtime pay when they work more than 40 hours in a workweek. The change is estimated to affect at least 4.2 million workers nationwide and could have a significant impact on many companies’ payroll and operations.

“The DOL has given employers a little over six months to familiarize themselves with the new regulations, closely monitor current staffing needs and work responsibilities, and implement staffing and scheduling changes as needed,” said Plumb. “The fact is that automatically increasing the salaries of previously exempt employees to the new threshold is not an option for most companies financially. Employers would be wise to begin the preparation process as early as possible by reviewing the current classifications of all employees, identifying which employees will be eligible for overtime beginning Dec. 1, getting a clear picture of the potential financial impact, and developing ways to control overtime.”