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Revised “white-collar” overtime regulations coming soon

October 30th, 2014  |  David Stephanides

Back on March 13, President Obama issued a memorandum to Secretary of Labor Perez directing his agency to propose revisions to the “white-collar” overtime regulations (29 CFR Part 541). Many observers are now speculating over what approach the DOL will take as it carries out its mission.

The rule-making process is expected to take from 12 to 18 months at a minimum, and a proposed rule is scheduled to be released this November. With an allowance for public comment, a final rule could be released near the end of 2015, all presuming the DOL acts quickly. The last time the regulations were updated in 2004 (the DOL issued its final rule on April 23), the rule-making process began with stakeholder meetings commencing during 2002 with a proposed rule released on March 31, 2003.

While it is unknown how the DOL will interpret the memorandum’s directive to “modernize and streamline” the existing regulations (it is doubtful the existing organizational structure will be scraped), many observers believe the minimum salary threshold will be moved up from its current $455 per week, or a further parsing of the job duties required to meet the various exemptions will be necessary, or both. Whatever follows, any proposed rule will require employers to reexamine their overtime pay classification schemes as they did back in 2003-2004.

If the DOL further delineates the job duties required to meet the exemptions, it will surely mean they will become more restrictive. After all, the thrust of the President’s memorandum is aimed at the “millions of Americans [who] lack the protections of overtime and even the right to the minimum wage.”

Job duties pertaining to managerial or supervisory responsibility (executive exemption), advanced knowledge in a particular field (professional exemption), or the exercise of independent judgment (administrative exemption) will most certainly be addressed. These fact-specific criteria are regularly the subject of a plethora of wage-hour class action litigation.