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June 25, 2015

Proposed Changes to Department of Labor’s Overtime Rules Would Entitle 160,000 Georgia Workers to Increased Pay for Overtime Work

On June 30, 2015, the White House announced proposed changes to the Department of Labor’s current overtime payment rules. If enacted, the changes would mean that approximately 160,000 Georgia employees would become entitled to 1.5 times their hourly rate of pay for all hours worked in a given week in excess of forty hours.

Under the current system, certain employees who work more than forty (40) hours per week are entitled to overtime pay at a rate of 1.5 times their normal salary for all hours worked in excess of forty (40) hours in a given work week. Whether a particular employee is exempt from overtime pay requirements is determined on the basis of two primary factors.

  1. First, the employee’s job duties must fall into one of the pre-defined categories of exemptions to the Fair Labor Standard Act’s (“FLSA”) minimum wage and overtime payment requirements, such as the executive, administrative or professional.
  2. Second, even where an employee’s job duties satisfy the requirements of one of the exemptions, the employee must also be paid a minimum salary of at least $455.00 per week to qualify for an exemption.

Employees paid less than $455.00 per week will generally not be exempt from the rule requiring overtime payment for hours worked in excess of 40 hours per week, regardless of the employee’s job duties.

The Department of Labor’s proposed changes would increase the salary floor for qualification for exemption from overtime payment from $455.00 per week to $970 .00 per week. This change would extend overtime pay (and, though not addressed in this post, the FLSA’s minimum wage requirements) to approximately 160,000 Georgia workers.

The potential effects of the proposed changes to the Department of Labor’s overtime payment and minimum wage requirements are far-reaching, both for employers and for employees. Please do not hesitate to contact MBW Law for a free consultation if you have questions about overtime payment, minimum wage requirements, or the newly proposed Department of Labor regulations.