Updating Overtime Pay Rules

On March 13, 2014 the President issued a memorandum directing the Labor Department to update the Fair Labor Standards Act (FSLA) to revise and streamline the existing overtime regulations to increase the number of white collar workers who would qualify for overtime pay.

The FSLA which became law in 1938 stiuplates that executive, administrative and professional employees (white collar woarkers) were exempt from collecting overtime pay.

According to the Labor Department Fact Sheet in 1975 the Department of Labor set the threshold below which white collar workers were entitled to overtime pay at $250 per week.  In 2004 that threshold was set at $445 per week.

Based on the current threshold, today, only 12 percent of salaried workers fall below the threshold that would guarantee them overtime and minimum wage protections (compared with 18 percent in 2004 and 65 percent in 1975).

So far the Department of Labor has not specified when changes will be made to the FSLA regarding overtime pay.

Sources:
Department of Labor
Labor Department Fact Sheet
Presidential Memorandum

By Owen Daniels