Salaried employees making between $23,600 and $50,400 a year may no longer be considered exempt from overtime laws as part of a proposed rule from the U.S. Department of Labor.
Currently employees making less than $23,600 must be paid overtime, but those making more can be considered salaried workers with no overtime pay.
David Dickerson and Madeline Wirt, attorneys with Whelchel, Dunlap, Jarrard & Walker of Gainesville, talked about the issue last week during a Greater Hall Chamber of Commerce seminar. Dickerson emphasized the timing for the proposed rule has shifted.
“We really don’t know when this rule is going to become effective,” he said.
He said the latest information is that it might be announced July 1 and would take effect 60 days later, or Sept. 1. But that remains indefinite, he said.
Dickerson said by phone Friday the DOL has set different times for a decision. DOL “would admit that (July 1) is a projection,” he said.
“One thing that’s important to realize for anybody that’s reading this is that this is a ‘proposed’ rule. It’s not necessarily going to happen,” Wirt cautioned.
“However, if you want us to speculate — something is going to go into effect,” she said.” Many (companies) understand that the current wage level probably does need to be increased because it’s been so long. But it’s such a jump.”
Both attorneys said California has long been known as “pro-employee” in its labor laws. The current “exempt” salary level in California is $41,600, twice the minimum monthly salary for the state’s minimum wage of $10 per hour.
“I think the salary threshold is the one that’s caught everybody’s attention,” Dickerson said. He added the overtime regulations were last updated in 2004.
The DOL received about 290,000 comments about the proposed rule, he said. The majority of those comments are negative, Wirt added.
Most companies don’t think they could pay the proposed salary, Wirt said. One reaction might be to “pay the same as they’re paying now but do it on an hourly basis.”
She explained companies might calculate an hourly rate based on how much overtime work they expect from an employee or “more than likely, not have them working as long, and I think that’s exactly what the Department of Labor is getting at.”
Wirt also said companies should be cautious about thinking they might use independent contractors instead of employees. She said the DOL “has been very aggressive, more so than in the past,” about the contractor issue.
She said, “One thing that we’ve seen, that we think is true, it’s still a healthy thing for employers to be looking at this.” Job descriptions should be reviewed, or created.
Dickerson added job descriptions should be matched against “what are the employees actually doing, and you hope it lines up with the job descriptions.”