Proposed Overtime Exemption Changes Would be a Game-Changer

Under federal wage and hour laws, employees are eligible for overtime (time and a half) for hours worked in excess of 40 in a workweek, unless they meet specific criteria to qualify as “exempt.”

New DOL rule would make millions of workers eligible for overtime

A proposed U.S. Department of Labor (DOL) rule would tighten the eligibility criteria and make millions of additional workers eligible for overtime pay. The new rule would increase the salary requirement for employees to qualify for the “white-collar exemption” from $684 to $1,059 per week, or from $35,568 to $55,068 per year.

The new rule would also raise the “highly compensated employee” threshold from $107,432 per year to $143,988 per year. And it would automatically increase the overtime thresholds every three years based on updated earnings data.

How the white-collar overtime exemptions work

Under the federal Fair Labor Standards Act, only certain types of employees are exempt from overtime. Essentially, these are jobs where the employee is paid to do a job rather than to work a certain number of hours. The main categories of exempt employees under the “white-collar” rules include:

  • Managers: if you are a bona fide manager with hiring, firing, and supervision power or comparable decision-making authority, you may qualify for the “executive” exemption. Keep in mind that this depends on job duties, not job title. If your employer calls you a manager, supervisor, or director, but you spend most of your time doing regular work tasks instead of managing, you shouldn’t be treated as exempt.
  • Learned professionals: this exemption applies to workers who do high-level knowledge work that typically reflects an advanced degree of education. Examples include physicians, engineers, architects, accountants, scientists, and so on. There is also a related exemption for “creative professionals” such as artists.
  • Administrative professionals: finally, this category includes workers with a high degree of discretion and decision-making power and whose work is primarily focused on keeping the business running, as opposed to creating the organization’s product or service. Examples include finance, human resources, and IT.

The proposed rule would affect workers whose jobs fall into those categories and who currently make more than $35,568 but less than $55,068 annually. Those employees can be considered exempt under the current rule but would be eligible for overtime under the new rule.

What this means for West Virginia workers

If the new rule goes into effect, then West Virginia employers covered by the FLSA (which is virtually all of them) with employees affected by the rule change will have two options:

  • Raise the employee’s pay to at least $55,068 per year, or
  • Convert the employee to non-exempt, which means paying time and a half for all hours worked in excess of 40 in a workweek, with accompanying updates to timekeeping and payroll.

In short, this new rule stands to significantly benefit many workers in West Virginia and across the country. It also shakes up what is already a complex and contentious area of wage and hour law. Unfortunately, far too many employers misclassify employees as exempt to avoid paying overtime. While being exempt has advantages for some employees – such as greater flexibility and autonomy – often, it’s just a ploy to get free overtime for the employer with no additional compensation.

If your employer is violating the overtime laws, contact us

If your employer is not paying you overtime as required by law, you have legal recourse. You can pursue compensation for your unpaid overtime and other costs due to your employer’s violation of the FLSA. However, winning these cases isn’t easy. You need an experienced employment law attorney to get to the bottom of what happened and determine your legal rights and options.

If you have any reason to believe your employer is violating wage and hour laws, take action to protect your rights. Give us a call or contact us online today for a free case evaluation with Klie Law Offices. A member of our legal team can listen to your story and explain your rights.