By Elizabeth McLeod
The Fair Labor Standards Act (FLSA) is the federal law that addresses minimum wage and overtime standards for most public and private employers. It also provides recordkeeping requirements and standards for child labor. Employees must be paid at least minimum wage and overtime for hours worked over forty in a workweek unless an exemption applies. The law includes administrative, executive, and professional exemptions among others.
On March 13, 2014, President Obama signed a memorandum instructing the United States Department of Labor (DOL) to update these regulations. The DOL is proposing sweeping changes to the FLSA that will significantly increase the minimum salary requirement for certain exempt positions. After 2016, increases are likely to occur annually based on inflation. Although not included in the proposed changes, the DOL also sought comments regarding the duties an employee must perform to qualify for the exemptions.
The DOL has not yet announced when these changes will occur or exactly what they will entail, but changes will be substantial and are likely to be effective during mid-to late 2016. Employers will have a relatively short time frame to comply once the changes are implemented. Stay tuned for changes that will have a significant impact on most public and private employers.