Overhauling overtime

DOL proposes new regulations governing employees entitled to overtime compensation

In July, the Department of Labor (DOL) issued proposed regulations that double the current threshold salary amount for employees to be exempt from DOL's overtime regulations. The new regulations are expected to dramatically increase the number of employees entitled to overtime compensation.

The Fair Labor Standards Act (FLSA) requires employers to pay employees at least 1 1/2 times their regular hourly compensation for all time worked in excess of 40 hours in any one workweek. Only if properly classified as "exempt" under FLSA regulations is an employee not entitled to overtime compensation.

Since it was enacted in June 1938, the FLSA has had exempted employees employed in bona fide executive, administrative or professional capacities. The exemption, known as the EAP, or white-collar, exemption was intended to apply to well-compensated white-collar employees who did not need the protection of FLSA's minimum wage and overtime requirements. Employees who meet the criteria set forth in DOL regulations are not subject to FLSA's minimum wage or overtime requirements. There also is an exemption for outside salespeople and skilled employees working in the computer field.

EAP exemption