PROPOSED CHANGES TO FAIR LABOR STANDARDS ACT OF 1938
After many years, the overtime pay law may be changing. As it stands now, those workers covered by the Fair Labor Standards Act (FLSA) of 1938 must be paid at least time and a half for each hour worked over 40 hours in a workweek. While this rule won't change, the number of employees covered under it will.
Under the current policy, employers are required to pay overtime to all hourly employees, but for salaried employees, there are two tests used to determine if overtime pay is required; the salary test and the duties test. Employers must pay overtime to those salaried employees earning less than $23,660 (the salary test) per year or those who do not have advanced job titles (the duties test).
The new proposal will increase the salary threshold to $50,400 and leave the duties test the same. This will require employers to track the hours of a larger number of salaried employees given that more will fall under the threshold.
The proposed changes are currently open for public comment. The new requirements are projected to be adopted by the end of 2015 and will take effect starting in 2016.
For updates on the progress of these proposed overtime pay changes, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040.