The Final Order: An Update to Overtime

The Fair Labor Standards Act (FLSA) is a federal law that requires employers to pay a minimum wage (currently $7.25/hour) and to pay overtime (1 ½ times the hourly rate) for any hours worked over 40 in a week. Of course, there is the “white collar” exception that exempts salaried employees who work in a “bona fide executive, administrative or professional” occupation from this entitlement.
Currently, the minimum salary that an employee must be paid to qualify for exemption is $455/week ($23,660/year). In other words, if you work in an executive, administrative or professional capacity but make at least $23,660 per year, you can be required to work in excess of 40 hours a week without ever getting overtime pay.
The U.S. Dept. of Labor attempted to modernize the overtime regulations by issuing a “Final Order” raising the minimum annual salary to $921/week ($47,892/year). The Final Order was to become effective December 1, 2016 and would have required employers to either start offering overtime or increase the salary of some of their workforce.
Unfortunately, the “Final Order” was struck down by the federal district court judge in State of Nevada v. U.S. Dept. of Labor. (Eastern District of Texas, filed 11/22/16). Time will tell whether an appeal court will overrule this decision or perhaps Congress will act to modernize the FLSA.

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