The U.S. Department of Labor recently proposed some revisions to the overtime exemptions in the Fair Labor Standards Act. These revisions could have a significant impact on employees in all fields, but particularly for people working white collar positions in the hospitality industry (such as hotels and restaurants).
Under current laws, employees who earn at least $23,660 per year could be ineligible for overtime if the primary duties of their job include managing other employees or performing any type of non-manual work directly related to business operations or management. The proposed revisions would more than double this exemption to $50,440. This amount would potentially increase every year, as it would be indexed to match the 40th percentile of weekly earnings for all salaried full-time workers across the country.
As of right now, there are not any proposed changes to the “duties tests” also involved in the current exemption caps. However, there is a chance that the DOL could make some changes to these tests so that they are more like those in California. There, the state requires all employers to pay overtime to employees who spend at least 50 percent of their time doing nonexempt work, which is a little less vague than the current federal rules.
We are currently in the middle of a 60-day comment period, during which the general public has the ability to respond to the proposal the DOL has issued. Businesses and employees in the hospitality industry are encouraged to give their thoughts about these proposed changes as soon as possible, as all comments will be subject to review before any action is taken to formalize the changes.
For more information on overtime exemptions and other similar rules, meet with experienced Dallas attorney Steve Kardell at Whistleblower Law for Managers.