The U.S. Department of Labor has issued a notice of proposed rule-making and
request for comments on changes to the regulations issued under the Fair Labor Standards Act (FLSA) that cover who is exempt from overtime pay within certain categories of employees. The Obama Administration estimates that upwards of 5 million workers would fall under this rule within the first year.
It is vitally important to understand the scale and scope of impact that this proposed rule will have on real estate investors (small businesses) and appropriate comments should be made through Regulations.gov.
Who is and who is not exempt for purposes of overtime pay under the FLSA rules depends on certain tests related to the primary job duties of executive, administrative, professional, outside sales, and computer employees and the amount that they are paid. This proposed rule primarily focuses on the latter item, specifically updating the salary and compensation levels used to determine who can be considered exempt.
The current threshold is $455 per week ($23,660 per year) while the new threshold would be $970 per week ($50,440 per year) in 2016. To be considered exempt from overtime, an employee must make not less than the salary threshold and meet the tests regarding their primary job duties for that particular category of position.
Comments are due on or before September 4, 2015. The links above contain numerous links to background material on the proposal. Click here to comment on the proposed rule change.
