New Overtime Regulations

Mar 10

Overtime could be redefined due to new proposed regulations soon to be issued by the Department of Labor.  The new proposed rules will redefine the salary basis requirements for overtime and would make many new employees eligible for overtime pay. Currently, the minimum salary basis for many Fair Labor Standards Act (FLSA) overtime exemptions is $455 per week, meaning that those individuals who make more than $455 per week ($23,660 per year) are not generally eligible for overtime pay. The Department of Labor, in response to a presidential memorandum, is expected to release new proposed rules that will increase the minimum salary basis requirements to between $42,000 and $52,000 per year, meaning that overtime will have to be paid to those employees who make up to $42,000 per year. This would significantly increase the number of employees eligible for overtime compensation, and thus, significantly increase labor costs for employers. Many restaurant employees could be eligible for overtime pay. Employers with exempt employees earning salaries between $23,000 per year and $52,000 per year should start giving thought to how they will respond if the  Department of Labor's new salary basis regulations as proposed take effect. In general, affected employees will either need to receive a raise to satisfy the new salary requirements, or they will need to start receiving time-and-a-half pay for overtime. Assuming there are no delays, the proposed rules are expected to be published in April and the earliest any new rules could become effective is late Fall 2015. The National Restaurant Association and TRA have been working closely with DOL and elected officials to minimize the impact of these proposed rules on our industry. For questions about how these changes impact your business contact the TRA's Legal & Professional Support Team.