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President Orders Employees to Be Paid More

Last week President Obama announced that he is directing the US Department of Labor to propose revisions to modernize and streamline existing overtime regulations.

Currently, an hourly employee is entitled to overtime pay for all hours worked in a workweek that exceeds 40 hours  unless the employee is deemed to be exempt.

To be exempt from overtime pay, an employee must:

– Be paid $455 per week;

– Manage two or more employees;

– Direct the management of the enterprise or a subdivision of the enterprise; and

– Have the authority to hire and/or fire employees or provide significant input into the process.

Receiving a salary is not conclusive proof that one is an exempt employee. Often times an employee that is paid on a salary basis is entitled to overtime because their job duties do not fit into the job duty portion of the exemption test.

$455 per week is akin to $23,000 per year. As President Obama pointed out, a person being paid $23,000 per year is unlikely to be involved in the type of management of the enterprise that the drafters of our federal overtime laws had in mind.

From the president’s remarks, it’s fair to guess that what he has in mind is an increase in  the weekly salary threshold. It’s possible the President also has in mind a plan to revise the job duties test in a manner that lays out how much time an employee is permitted to spend doing non-managerial tasks before they are entitled to overtime.

It is predicted that restaurants and retailers will be hit the hardest by these changes. In Edgeville, there is no shortage of restaurants and retailers. There is also no shortage of employees who are being unfairly taken advantage of and denied overtime pay by being improperly classified as exempt. With the way the current regulations stand, numerous employers violate federal law on a routine basis by not paying overtime to their salaried employees.

The White House memorandum: http://www.whitehouse.gov/the-press-office/2014/03/13/presidential-memorandum-updating-and-modernizing-overtime-regulations

DISCLAIMER: NOTHING IN THIS BLOG POST IS MEANT TO SERVE AS LEGAL ADVICE, BUT RATHER, IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY. DUE TO THE CHANGING NATURE OF THE LAW, ALL INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE.

 

 


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