President Obama has asked the Department of Labor (DOL) to update the current overtime regulations to expand the number of workers who are eligible for overtime pay. While the actual details have not been released and may not be for some time, it is likely the DOL will focus on increasing the salary threshold. This threshold is currently $455 a week. This means that all employees who make more than $455 per week may be eligible for exemption from overtime pay.
If the threshold does increase businesses will have a few options to control their costs. Employers may:
- Pay newly non-exempt employees more in overtime;
- Closely monitor hours employees work to avoid overtime;
- Decrease hourly rates to pay employees the same with overtime pay included;
- Convert all employees to part time status to avoid overtime; or
- A combination of the previous four options.
Regardless of how your business decides to handle this change, it is still important to anticipate that employees may lose flexibility in their schedules, there will be administrative burdens to track hours employees work, and there will likely be an increase in wage and hour litigation.
Although this process will likely take quite a while, we are unlikely to see the final product before the end of 2015, employers are not doomed to sit and wait. If you would like to participate by commenting on any proposed regulations you can go here to see how.
If you have any questions regarding Wage and Hour laws, please contact any of the attorneys at Royal LLP at (413) 586-2288.