Proposed Overtime Pay Laws Could Affect Many California Workers

Sacramento, CAThe US Department of Labor has recommended changes to overtime pay laws, increasing the number of employees who are considered non-exempt from overtime pay. That means the number of employees eligible for overtime pay could increase if the recommendations are accepted. Overtime pay lawsuits have been filed against many employers alleging employees were wrongly denied or misclassified as exempt from overtime pay.

According to The National Law Review (8/19/15), the US Department of Labor proposed a change to one of the tests used to verify whether salaried employees are exempt from overtime pay. Under the Fair Labor Standards Act (FLSA), salaried employees are eligible for overtime pay if they are considered non-exempt. To be exempt from overtime pay, employees must meet certain standards, including being paid a salary and having the duties of an executive. One of those standards is the salary level - salaried employees must make at least $455 per week to be exempt from overtime pay.

Under the proposed rule change, salaried employees would have to make at least $970 per week ($50,440 per year) to be exempt from overtime pay. Employees who meet the current pay threshold but do not meet the proposed threshold would be reclassified as non-exempt and would be eligible for overtime pay.

Lawsuits have been filed against employers alleging employees are misclassified as executive or administrative to avoid being paid overtime. Plaintiffs allege, for example, that although they are given an administrative job title, they frequently do the work of an hourly employee, such as stocking shelves.

Under the FLSA standards, it is an employee’s actual job duties - and not just the job title - that determine exemption from overtime. If a salaried worker is given an administrative title but is still doing the work of an hourly employee, that worker should still be paid overtime. With the new proposed rules, even employees who do some administrative work but make less than $970 a week will be eligible for overtime, meaning many more people would be eligible for overtime pay under the new regulations.

Meanwhile, in August a federal appeals court reinstated laws that extended minimum wage and overtime protections to home care workers who provide support for elderly and disabled people. The court overturned a lower court ruling that struck down the regulations. Groups fighting against the decision may still file an appeal.