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Two things employees should know about the new overtime rule

Overtime protections aren't for everyone. That point was made clear in 2014 when President Obama first signed a memorandum requiring the Department of Labor to update the regulations that determine who does and who does not receive these protections.

Workers that are particularly vulnerable to abuse are those that are considered "white collar" workers. These workers may receive payment that puts them just outside of the protections of overtime regulations, allowing employers to require work well over the typical forty hour work week while only providing the base salary compensation. When broken down to an hourly wage, this can translate to the equivalent of minimum wage for professional level positions.

Employers can get away with this because of an exemption in the overtime regulations. In order to meet this exemption, the "white collar worker" exemption, the employer must meet three tests. First, the worker must receive a salary. Second, the salary must be over an amount deemed acceptable within the regulations. Third, the worker must perform "executive, administrative or professional duties" as defined by law.

These regulations are undergoing an update and two specific updates will impact this particular exemption.

Thing 1: Update to the acceptable salary amount

At the time of President Obama's announcement, the second test, referred to as the salary level test, stated that salaried employees making approximately $455 per week or less qualified for overtime protection. This translated to an approximate annual salary of $23,660. The new rule bumps this up to include those making up to $913 per week, or the equivalent of a $47,476 annual salary.

Thing 2: Implementation of automatic updates

The rule also includes automatic updates to the overtime protection amount, scheduled to occur every three years begin in 2020. This change is intended to help ensure that the overtime protections are protected from becoming outdated in the future.

It is important to note that this information is based off of the Office of Management and Budget's Final Rule. The final version included in the Federal Register may include slight differences.

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