In a brief memorandum recently issued to the Secretary of Labor, President Obama directed the Department of Labor (DOL) to update federal overtime rules. As noted in the memorandum, the Fair Labor Standards Act (FLSA) provides basic rights and wage protections for American workers, including Federal minimum wage and overtime. Most workers covered under the FLSA must receive overtime pay of at least 1.5 times their regular pay rate for hours worked in excess of 40 hours per week (Alaska, California and Colorado have established additional requirements, including daily overtime).The memo asserts that executive, administrative, and professional employee exemptions to the FLSA's overtime requirement have not kept up with our modern economy and, therefore “millions of Americans lack the protections of overtime and even the right to the minimum wage.” Based on this assertion, President Obama directs the DOL to “propose revisions to modernize and streamline the existing overtime regulations” and to “consider how the regulations could be revised to update existing protections consistent with the intent of the [FLSA]; address the changing nature of the workplace; and simplify the regulations to make them easier for both workers and businesses to understand and apply.” The full text of the memorandum can be read here.

While the memorandum does not provide any further details on the specific revisions the President would like to see, the New York Times has speculated that changes could include raising the minimum salary requirements for the exemptions which are currently set at $455 per week. Other possible revisions include a closer examination of fast food managers, loan officers and other specific careers, as well as alteration of the “primary duty” test to ensure that exempt employees perform a minimum percentage of exempt work in order to qualify for the overtime exemption. The New York Times article can be read here.

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