I was very pleased yesterday to participate in a “listening session” conducted by Dr. David Weil, administrator of the Wage and Hour Division. Dr. Weil spent an hour on the phone with several employees from around the country who shared their experiences and opinions on the topic of overtime laws and regulations.
President Obama issued an order on March 13, 2014 requiring the U.S. Department of Labor to revise regulations governing overtime pay under the Fair Labor Standards Act (FLSA). Currently, under the FLSA, most workers receive overtime pay (1.5 times their regular rate of pay) for any time worked in excess of 40 hours a week.
However, there are exemptions to this requirement which exempt “white collar” employees who are classified as executive, administrative or professional employees and who make at least $23,660 a year (or $455 per week). Under the presidential memorandum, many of these employees may be reclassified as hourly, eligible for overtime pay.
At the session, employees shared their feedback on the potential impact of the presidential memorandum and the future DOL rules implementing this memorandum. Most told stories about being classified as exempt despite the fact that the spend most of their time performing hourly labor. Some reported being forced to work 70 or more hours without extra pay. One woman complained that she wanted to quit but couldn’t because she was a single mother and needed the job.
Dr. Weil said that he was conducting outreach to the employee community to solicit their views. He said that they wanted to gather feedback on three general areas: two features of the existing rules—the salary threshold and the duties test—and how to simplify the rules and make them more clear. Although DOL did not provide information on what the new minimum salary threshold would be, outside groups have recommended a threshold of up to $50,000.
Under current rules, to qualify under the executive exemption, an employee’s primary duty must be to manage the company and supervise at least two full-time employees. New rules may require that these managers primarily engage in a certain percentage of their work as exempt work to qualify. For example, California has a 50 percent rule, which means that to qualify for this exemption, this manager must spend half of their time engaged in exempt or managerial work. This would mean that managers would have to keep track of their daily activities.
The participants at the session included employees from a variety of industries, such as restaurants, grocery stores, retail, health care, construction and human resources. Overall, the workers expressed concern that the current rules were unfair and resulted in them being forced to work excessive hours without fair pay.
The presidential memorandum can be found at www.whitehouse.gov