The Fair Labor Standards Act (“FLSA” or the “Act”) governs the minimum wage and overtime compensation requirements for employees in almost all workplaces across the country. However, unsurprisingly, employers’ obligations under the FLSA are more complicated than simply paying their employees the set minimum wage (currently, $7.25/hour) and 1.5 times their regularly hourly rate for all hours worked over 40 hours per week. The many exemptions contained within the Act limit the number of employees who are entitled to these minimum wage and overtime guarantees.
For example, under the FLSA, employees “employed in a bona fide executive, administrative, or professional” capacities are exempt from the Act’s protections. Since 2004, Federal regulations have defined “bona fide executive, administrative, or professional” employees as those paid $455 or more per week on a salary basis (just $23,660 annually!) and whose job duties primarily involve executive, administrative, or professional duties as defined by the regulations. For specific details about what duties make an employee exempt, see sections 541.100-106, 541.200-204, and 541.300-304 of the regulations.
Up until May of this year, the U.S. Department of Labor had not updated the regulations to account for standard of living and inflation increases. This meant that employees performing executive, administrative, or professional duties could be paid as little as $23,660 per year, yet be required to work an unlimited number of hours per week with no overtime compensation. However, effective December 1, 2016, the minimum salary requirement for executive, administrative, and professional employees to be exempt from minimum wage and overtime requirements will be raised to $913 per week or $47,476 annually.
This means that, unless employers adjust salaries to account for this increase, employees performing executive, administrative, and professional duties and earning between $23,660 to $47,476 per year will be entitled to compensation for overtime worked. Come December, if you think your employer is violating the amended regulations, call to schedule a consultation with a Green Savits attorney who can assess your claims and advise you of your rights.