HR Professionals Magazine May 2014

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May Issue Highlights


In the Spotlight: Dorothy Knapp, SPHRMay-2014-Cover

Hot Topics


 

Changes to FLSA Overtime Rules Expected Soon
President Barack Obama will instruct the Labor Department to make overtime pay available for “millions” of workers currently considered exempt by narrowing the Fair Labor Standard Act’s “white-collar” exemption. The initiative is expected to focus on tightening the qualifications for workers to be classified as bona fide executive, administrative, professional and outside sales employees. These white-collar employees are currently exempt from the FLSA’s general requirement that workers be paid time and a half for all hours worked in excess of 40 each week.

 According to former Deputy Labor Secretary Seth Harris, the initiative appears to be “part of the larger agenda to increase workers’ wages. This is another piece of a larger agenda–raising the minimum wage, improving job training programs, and creating jobs through significant improvements in infrastructure.”

The President will direct the Labor Department to craft its proposed rule by early summer.

Currently a worker needs to make $23,660 a year to meet the exemption’s income-level requirement. If that amount were raised to $31,200 (to $600 per week from $455 per week), it would include many workers performing managerial tasks, especially in major metropolitan areas where wages are generally higher than elsewhere. The FLSA does not define executive, professional, and administrative employees, but instead gives the labor secretary broad discretion to define these terms. Hopefully, the DOL will consider that whatever salary level it adopts should be compatible with local economies throughout the nation, from lower-wage rural areas to higher-wage urban areas.

It is estimated to take a year to 18 months for the new rules to take effect. HR professionals are encouraged to begin the audit process to ensure that your current FLSA classifications are in order before the new regulations become law.

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