Blogs

Obama Proposes Sweeping Changes to FLSA Exemptions

03.13.14

A few weeks ago, President Obama issued an Executive Order raising the minimum wage for workers on new federal contractors from $7.25 an hour to $10.10 an hour. That measure was designed to build momentum for a minimum wage increase for the private sector as well.

Now, President Obama has announced he will direct the Department of Labor to revise the so-called “white-collar” exemptions on executive and professional employees so that many currently exempt employees will not be considered exempt and will therefore be entitled to overtime compensation. These regulations were last revised in 2004 under then President George W. Bush. This directive is expected to be issued on March 13, 2014.

Experts believe that the proposal would both increase the minimum amount paid to salaried, exempt employees and alter the exemptions to be narrower and therefore fewer currently exempt employees would meet the new test(s). The current minimum weekly salary for salaried, exempt employees is $455 per week and was established in 2004. The President is not expected to set a new minimum weekly salary on March 13 but will leave that up to the Department of Labor. Additionally, experts expect that the President will direct the Department of Labor to more narrowly define who meets the executive exemption to those who spend more than 50% of their time in supervisory tasks. Currently, there is not a bright line rule on how much time must be spent supervising to meet the exemption.

Look out for a follow-up blog post as this story unfolds!

The publications contained in this site do not constitute legal advice. Legal advice can only be given with knowledge of the client's specific facts. By putting these publications on our website we do not intend to create a lawyer-client relationship with the user. Materials may not reflect the most current legal developments, verdicts or settlements. This information should in no way be taken as an indication of future results.

Search Tips:

You may use the wildcard symbol (*) as a root expander.  A search for "anti*" will find not only "anti", but also "anti-trust", "antique", etc.

Entering two terms together in a search field will behave as though an "OR" is being used.  For example, entering "Antique Motorcars" as a Client Name search will find results with either word in the Client Name.

Operators

AND and OR may be used in a search.  Note: they must be capitalized, e.g., "Project AND Finance." 

The + and - sign operators may be used.  The + sign indicates that the term immediately following is required, while the - sign indicates to omit results that contain that term. E.g., "+real -estate" says results must have "real" but not "estate".

To perform an exact phrase search, surround your search phrase with quotation marks.  For example, "Project Finance".

Searches are not case sensitive.

back to top