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Department Of Labor Likely To Amend Salary Exemption

According to CNN, the Obama administration is getting closer to issuing its proposed amendment to the overtime compensation laws. The amendment will provide overtime pay to low-salaried managers who don’t currently qualify for them.

Pursuant to the Fair Labor Standards Act (FLSA), most “non-exempt” workers are entitled to overtime pay at a rate of one and one-half times their standard rate of pay for all time worked in excess of 40-hours in any one work week. However, “exempt” workers are not entitled to overtime compensation, regardless of the number of hours worked in a week.

The changes are aimed at adjusting the “salary” basis test that allows companies to avoid paying overtime to any full-time workers making as little as $455/week – or $23,660 a year, by classifying them as “exempt” and paying them as salaried employees, rather than hourly. The salary limit was originally enacted to carve out an exemption so that high level executives would not receive overtime pay, however the sum has not kept up with inflation. Thus many lower level managers, sales employees and administrators who earn low salaries are denied overtime pay that they, arguably, are entitled to. Policy experts believe that the Department of Labor will likely raise this threshold to somewhere between $42,000 and $52,000.

For more information about exemptions, and whether you qualify for overtime compensation, please contact the experienced Atlanta wage and hour lawyers at Buckley Beal LLP for an immediate and confidential consultation.

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