Overtime pay, minimum wage rules scheduled to change in late 2014

In response to President Obama's view that many deserving workers are being denied overtime pay and minimum wage salaries, the Department of Labor (DOL) Wage and Hour Division has made it a priority to overhaul the Fair Labor Standards Act (FLSA) later in 2014, according to the Society for Human Resource Management (SHRM).

The upcoming changes to the FLSA, scheduled for completion in November, mean veterinary practices and other businesses may need to reconsider certain employees' work hours, job classifications, or salary levels.

What the current FLSA says

The Department of Labor's "white collar exemptions" rule, which was last updated in 2004, currently specifies that certain employees who earn at least $455 per month ($23,660 per year) are exempt from receiving federal minimum wage or overtime pay. Employees affected by the rule include:

  • Executives
  • Administrators
  • Professionals
  • Computer employees
  • Outside salespersons
  • Highly compensated employees

The White House has previously voiced two primary concerns about the FLSA as it stands today: that the minimum salary threshold has not been raised to account for inflation, thereby excluding millions of deserving workers, and that many employees' job duties place them in exempt categories even though they deserve protection by the FLSA.

The new proposed rule would raise the minimum monthly salary required for exemption, as well as update the criteria for specified "white collar" occupations so that workers who qualify for overtime pay and minimum wage salaries are not wrongly exempted. No new proposed minimum salary basis has been provided yet.

Potential effects on businesses

Once the rules are updated, many employers will be forced to examine their business structure and make adjustments to make sure they are fairly paying employees, said attorney Allan Bloom in a March SHRM article.

According to Bloom, paying more overtime and raising wages to the federal minimum wage could force some businesses to make tough decisions involving wage and hour audits, reduced overtime, layoffs, and adjustments to fluctuating workweeks.

"It's a zero-sum game - the money has got to come from somewhere," Bloom said.

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