Employment Law Alert

Congress Attempts to Block DOL’s Proposed Overtime Rule

Under the Fair Labor Standards Act, employees must be paid overtime for all hours worked over 40 in any workweek – unless the employee is “exempt”.  In order to be exempt under the commonly used “white collar” exemption, the employee must be paid at least the “minimum salary threshold”. Last summer, the U.S. Department of Labor issued a proposed rule that would increase the minimum salary threshold from $23,660 per year to $50,440 per year.  According to the DOL, when implemented, the proposed new salary threshold will result in millions of employees across the country being reclassified from exempt to nonexempt and therefore entitled to overtime pay for hours worked over 40 per week. The planned implementation date for this new rule has been uncertain as employers have watched the DOL extend the date several times. The most recent DOL announcement stated that the final rule would be published in July of 2016, with an effective date 60 days later. However, on March 16, 2016, Congress challenged the proposed rule by introducing the “Protecting Workplace Advancement and Opportunity Act”. (See http://edworkforce.house.gov/uploadedfiles/intro_bill_pwaoa.pdf for the text of the Act.)

Certainly, the text of the yet to be released final rule and the likelihood of success of the Act challenging the rule is unknown and employers are advised to  plan ahead for the adjustments that will be needed in the event the proposed rule (or more likely, some variation of same) becomes law.

Class actions by plaintiff’s attorneys alleging wage/hour violations are on the rise and will increase as the publicity and controversy about the new overtime rule continues. Class actions expose an employer to claims for double damages, a longer statute of limitations and attorney’s fees.  An internal audit performed by an attorney is recommended as soon as possible to determine which employees will be affected by the new law and whether any employees are currently misclassified. It is important to note that internal audits not performed by an attorney, may be used as evidence of a willful violation of the FLSA which carries sanctions.

For assistance with an internal audit, contact Madeline Wirt, Esq. at 770-535-4001.  Ms. Wirt has over 20 years’ experience in labor and employment counseling, advising large and small employers on their responsibilities and obligations under state and federal employment laws. She has a long history of representing employers before state and federal agencies and in court.