Changes in the Fair Labor Standards Act
By Kluger Kaplan April 24, 2019
By Michael Landen
The number of wage and hour lawsuits has considerably increased in recent years, and unpaid overtime ranks high among the most combative issues. This March, the United States Department of Labor (DOL) announced a proposed rule that would make more than one million American workers eligible for overtime. The proposed change to the Fair Labor Standards Act (FLSA) increases the required yearly salary to maintain an exempt position from the current $24K per year to $35K per year, effective January 2020.
Unlike the previous proposal from the Obama administration in 2016, the current one does not establish automatic, periodic increases of the salary threshold over time. Instead, the proposal is asking for public comment on how the federal DOL may update the requirements every four years. The last time the salary threshold was increased was 2004.
If the proposal to raise the salary threshold is approved, it will likely lead to additional lawsuits. From an employer standpoint, this may create an additional hurdle in terms of having to deal with potential overtime issues. But, since the threshold hasn’t been raised in 15 years, it seems timely to review.
Employers who currently have exempt workers who earn more than $455 per week, but less than $679, yet match the duties requirements can comply with the new proposal by increasing the employee’s salary to the new established level, limiting hours so employees do not work overtime or reclassifying employees as non-exempt.
Regardless of the final DOL rule, employers must also take into consideration how the new proposal interacts with exemptions under state laws. While some states do not have overtime laws, others incorporate the FLSA as it stands, incorporate the FLSA overtime provisions, but with greater salary requirements or have their own exemptions and salary levels. Florida overtime laws essentially defer to the federal law and do not have any state specific exemptions.