Changes to FLSA Overtime Rules
Today the United States Department of Labor (DOL) published proposed rules that will dramatically change which employees are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA). The proposed rule changes are projected to increase the number of workers eligible for overtime from approximately 5 million to, in some estimates, 15 million. Under the proposed rules, it is possible that only those workers who earn at least $50,440 per year and fit within one of the established exemption categories may be treated as exempt.
The proposed changes to the FLSA's exemption rules are a far cry from Congress's intent in passing the FLSA, which was to "aid the unprotected unorganized and lowest paid of the nation's working population; that is, those employees who lacked sufficient bargaining power to secure for themselves a minimum subsistence wage." Hogan v. Allstate Ins. Co., 361 F.3d 621 (11th Cir. 2004) (quoting Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 707 n. 18 (1945)). If the proposed rules are in fact implemented in 2016 as currently intended, the costs to employers both in additional pay and compliance will be significant. For non-profit organizations, the additional costs could outstrip the funding that such organizations receive and which allows those organizations to serve their stakeholders.
However, the proposed rules are not a fait accompli. When the IRS attempted to change the rules related to the tax exempt status of 501(c)(3) organizations, that attempt was met with over 150,000 negative comments, a backlash that caused the IRS to retreat from its proposed rule changes. The same opportunity exists with respect to DOL's proposed FLSA rule changes. Every employer, industry association, local government and any other organization who will be required to increase the cost of its services to customers or stakeholders as a result of higher labor costs should submit comments to DOL opposing these rule changes. Only by eclipsing the type of negative responses that the IRS received is there a chance that DOL's radical attempt to re-write the FLSA can be stopped.
Taylor English will publish a white paper explaining the proposed rules. Taylor English will also be preparing comments in response to the DOL's proposed rules which can be customized to fit any particular industry, business segment or non-profit organization. We encourage our clients and friends of the firm to participate in this process. By preparing comments for a large group of participants, the costs of submitting comments for your organization can be contained.