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U.S. DEPARTMENT OF LABOR PROPOSED AMENDMENTS TO WHITE-COLLAR OVERTIME EXEMPTIONS

The U.S. Department of Labor is finally proposing a rule to amend the Fair Labor Standards Act’s overtime regulations. The Fair Labor Standards Act, 29 U.S.C. 207(a)(1) requires employers to pay employees at one and one-half times the regular rate for every hour worked in excess of 40 hours in a work week. However, the Fair Labor Standard Act exempts certain employees from overtime pay if the employer pays them a salary of $23,660.00 a year and employs them in certain positions defined as executive, administrative, professional, outside sales, and computer employee. These exemptions from the overtime provisions of the Fair labor Standards Act is known as the White-Collar exemptions. The proposed new rule would increase the salary component from $23,660.00 to $50,440.00. Currently, employers are able to take advantage of their employees by paying them $23,660.00 (less than the poverty level for a family of four) in a position defined as executive, administrative, professional, outside sales, or computer employee and make them work sixty to seventy hours a week without any overtime pay. Under the proposed new rule employers would not be able to take advantage of the White-Collar exemptions to the overtime provisions of the Fair labor Standards Act unless they pay their employees a salary of $50,440.00. The proposed rule also increases the “highly compensated employee” exemption from $100,000.00 to $122,148.00. The U.S. Department of Labor anticipates that five million additional workers would be entitled to overtime within the first year alone as a result of the increased salary threshold.