A recent proposed rule from the Obama administration could allow more employees to become eligible for overtime benefits. Currently, many professional, administrative, executive, and managerial employees that earn more than $23,660 per year can be considered exempt employees, meaning that their employer will not have to pay overtime if they work more than 40 hours a week. In the proposed rule, the Department of Labor is more than doubling the salary amount minimum to $50,440 per year.
This is a monumental shift that, based on different estimates, will affect somewhere between 5 and 13.5 million Americans who are currently do not receive overtime pay because they make more than the current annual salary minimum of $23,660, but less than the proposed $50,440 per year. An update to the salary minimum for salaried employees is badly needed as the current salary minimum of $23,600 exempts many more employees from overtime pay than was originally intended. Today, it is possible that someone earning an annual salary below the poverty line can be exempt from earning overtime pay.
Although this change has been hailed as a step forward for employees, it is still a proposed rule that is in the process of being finalized. Before this rule can become final, it must go through a 60 day notice-and-comment period, meaning that the government must take comments from the general public to help inform their final decision on how the final rule should be structured. That comment period is taking place right now and is set to end on September 4, 2015: comments can be made here. Any additional comments from individual workers will go a long way in showing that there is broad public support for such a change.
Employers have already indicated their fierce opposition to this change as many, especially in the retail industry, have used this rule to put pressure on employees to work well beyond 40 hours per week while paying those employees low salaries. As a firm that has advocated for many employees who were wrongfully denied overtime pay, Schaefer Halleen stands ready to assist employees in asserting their right to be paid for overtime in situations where they may have been previously exempt.