Employment Lawyers Can Help White Collar Workers Understand the New Labor Rule as it Affects New Eligibility for Overtime Pay
Employment lawyers will soon be busy helping non-exempt employees understand a new rule from the U.S. Department of Labor. This new rule extends the right to overtime pay to 4.2 million additional white collar workers in its first year. In May, President Obama and Secretary of Labor Thomas Perez announced the publication of the Department of Labor’s new rule updating the overtime regulations that apply to white collar workers. We can define these white collar workers as executive, administrative, and professional (called EAP) workers. This also includes certain computer and outside sales employees under the Fair Labor Standards Act. The new rule will become effective on December 1, 2016.
Experienced Employment Lawyers
Our employment lawyers counsel employees covered under the Fair Labor Standards Act. We have litigated numerous unpaid overtime pay claims on their behalf. If you believe that you have a claim against your employer for unpaid overtime pay, click here Contact Kilgore & Kilgore to connect with an employment lawyer for a free review of the facts of your case.
Fair Labor Standards Act Protects American Workers
The Fair Labor Standards Act was originally signed into law by President Franklin Roosevelt in 1938. It provides several important protections for American workers. The Fair Labor Standards Act requires the payment of a minimum wage and overtime pay for eligible employees. Currently the Fair Labor Standards Act’s minimum wage is $7.25 per hour. We can define non-exempt employees as those covered by the Fair Labor Standards Act who are eligible for overtime pay. They are entitled to pay at a rate not less than one and one-half times their regular pay rates for time worked in excess of 40 hours in a workweek. The U.S. Department of Labor administers and enforces the Fair Labor Standards Act.
Exempt Employee Definitions
Under the U.S. Department of Labor’s regulations, an EAP worker is generally exempt from the overtime pay protections of the Fair Labor Standards Act if he or she meets three requirements. First, the worker must receive a fixed, invariable salary. Second, the worker’s salary must equal or exceed a specified amount. Third, the worker’s job primarily involves executive, administrative, or professional duties.
Since 2004 and up to December 2016, the weekly salary level for an EAP worker was $455 or $23,660 annually. Bona fide EAP workers who received a fixed annual salary of $23,660 or more were exempt from overtime pay under the Fair Labor Standards Act
Under the new rule, the U.S. Department of Labor will increase the salary level to the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, the South. That level is $913 per week or $47,476 annually. Under the new rule, an employer must pay its salaried EAP workers $47,476 or more annually in order for them to be exempt from overtime pay under the Fair Labor Standards Act. Under the new rule, salaried EAP workers who earn less than $47,476 annually are entitled to overtime pay if they work more than 40 hours in a workweek.
Thousands of Workers in Texas Affected
The U.S. Department of Labor estimates that under the new rule over 370,000 currently-exempt EAP workers in Texas will be entitled to overtime pay. This is only if they work more than 40 hours in a work week. This assumes their employers do not raise their salaries to the new threshold to make them exempt.
Female Workers Affected By the New U.S. Department of Labor Rule
The new rule, according to the U.S. Department of Labor’s estimate, will mean that American workers will earn an additional $1.2 billion in pay. U.S. Department of Labor estimates that approximately 56 percent of affected workers are women and that 61 percent are age 35 or older.
Highly Compensated Workers Also Affected
The new rule also raises the total annual compensation level for Highly Compensated Employees (HCE) above which they would not be eligible for overtime pay. The new HCE salary level will increase from $100,000 to $134,004 annually. In 2020, the salary thresholds for EAP and HCE workers will be updated automatically every three years. The new rule allows employers to use other income received by these workers toward the HCE compensation level. Income from discretionary bonuses, incentive payments, or commissions can satisfy up to 10 percent of the new threshold. However, these payments must be made at least on a quarterly basis.
Employment Practices May Change
Many employers may change their practices as a result of this new rule. With this in mind, employers may be concerned about a potential jump in overtime pay. First, employers could increase some salaries to the new salary threshold to make non-exempt employees exempt. Second, employers may limit some workers to 40 or fewer hours per workweek to avoid overtime pay. Third, employers may reclassify their white collar workers to non-exempt hourly workers. In such cases, hours will be closely monitored and restricted. Nevertheless, some employers could simply choose to pay overtime to their newly non-exempt, salaried workers for their hours worked in excess of 40 in a workweek.
Kilgore & Kilgore has employment lawyers with the skill and experience to counsel and represent you in an unpaid overtime claim ay against your employer. To learn more about our overtime pay employment practice, click here Dallas Wage and Hour Lawyer. To contact us for a free review of the facts of your case with an employment lawyer, click here Contact Kilgore & Kilgore.