Employment Law

Changes to the Fair Labor Standards Act

An emergency preliminary injunction has prevented this change to go into affect. For more information read "The Uncertain Future of Overtime Pay for White Collar Workers." To learn more about what may happen continuing reading. The Fair Labor Standards Act (29 U.S.C. 531 et. seq.), requires that most jobs be paid an hourly rate of pay and that these jobs be paid at time-and-a-half the regular rate of pay for hours worked over 40 or more in the employers’ workweek. These jobs are called “hourly” or “non-exempt” jobs.

Employers can classify other jobs as “exempt” or “salaried” positions.  Exempt employees are paid a weekly salary without regard to the number of hours worked in a workweek, are not eligible for overtime pay for hours worked over 40 in a workweek, and cannot have deductions taken from their weekly salary except in some limited circumstances.

Exempt Job Requirements
For an employer to classify a job as exempt, a job must meet certain duties and the employer must pay the employee a minimum weekly salary.  The minimum weekly salary is currently $455 per week.

The Department of Labor recently changed the minimum weekly salary.  As of December 1, 2016, the new minimum weekly salary increases to $913 per week. (At $913 per week, a salaried employee would be paid $47,476 for 52 weeks of work.)

What to Expect
If you are in an “exempt” or “salaried” position and your employer is paying you a weekly salary of less than $913 per week, your employer will have to adjust your pay on or before December 1, 2016 by:

1.    Increasing your weekly salary to $913 per week or more. Employers can use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent ($91.30 per week) of the new salary requirement.  To do so, the employer must pay this nondiscretionary bonus on a quarterly or more frequent basis.

2.    Reclassifying your position to an “hourly” or “non-exempt” position.  If this happens, your employer would pay you an hourly rate of pay, choose to not pay you when you miss work, and pay you time-and-a-half your regular rate of pay for hours worked over 40 in a work week.

What to do now
Employers have until December 1, 2016, to comply with this change.  Attend any meetings called by your supervisor or the HR department about this subject.  Asks questions if you do not understand how your pay will be affected.

If, after December 1, 2016, your weekly salary has not increased to at least $913 per week or your pay has not been changed to an hourly rate of pay, you should contact the Wage and Hour Division of the U.S. Department of Labor.

Their contact information is:
Phoenix District Office
U.S. Department of Labor                                      Phone:(602) 514-7100
Wage and Hour Division                                                     1 866-4USWAGE
230 N. First Avenue, Suite 402                                              866-487-9243
Phoenix, AZ85003-1725

This website has been prepared for general information purposes only. The information on this website is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. Also, the law may vary from state-to-state or county-to-county, so that some information in this website may not be correct for your situation. Finally, the information contained on this website is not guaranteed to be up to date. Therefore, the information contained in this website cannot replace the advice of competent legal counsel licensed in your jurisdiction.

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