Posted May 12th, 2014 in Legal Insights

POTUS Says Overtime Laws Overdue for an Update… Could Changes be Extreme?

In what could be a campaign issue in the upcoming mid-term elections, President Obama has directed the Department of Labor (DOL) to propose revisions to its rules for enforcing the Fair Labor Standards Act (FLSA). First passed in 1938, the FLSA governs minimum wage, overtime pay and recordkeeping standards for both public and private U.S. employees. The President’s directive instructs the DOL to review overtime eligibility for overtime-exempt employees. According to Nilan Johnson Lewis attorney Joe Schmitt, the language of the directive may indicate significant changes in the way employers evaluate workers’ exempt statuses. Schmitt notes that a change is indeed due, but that the DOL should be careful not to adopt standard appropriate for New York or Los Angeles to the entire country. He also says that upcoming changes to the FLSA might include an adoption of the so-called “50 percent test” in which employees whose primary job responsibilities are exempt would be eligible for overtime if they can prove they spend half or less of their time performing those duties. Such a change would impose significant burdens on employers and would substantially enhance employers’ wage and hour liabilities. Contact Joe Schmitt at jschmitt@nilanjohnson.com or (612) 305-7577.