President Obama issued an executive order last week that would expand the pool of workers eligible for overtime pay under the Fair Labor Standards Act (“FLSA”).
You may or may not already be familiar with the overtime portions of the FLSA; in case you aren’t, we will provide you with a brief synopsis. In short, the FLSA provides that many employers have to pay overtime to their employees who work more than 40 hours per week. This provision is not universal, however, because the Department of Labor is given the ability to create exemptions to it. As a friendly reminder, don’t forget that you can make overtime even if you are a salaried employee. Although salaried employees are often exempted from overtime by the professional, executive, or administrative exemptions, there is a threshold below which salaried employees must be given overtime pay. Prior to recent developments, the FLSA guaranteed overtime pay for salaried workers only if they made less than $455 per week or roughly $23,000 per year.
The new executive order issued last week, for which specifics have yet to be released, is estimated to increase that threshold to between $550 and $970 per week, or approximately $28,600 to $50,440 per year. In other words, depending on the specifics of the executive order, salaried workers who make up to $970 per week may now be covered under this executive order.