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By: David Cole
In an article this morning, the New York Times is reporting that President Obama will direct the Department of Labor (“DOL”) to revise its regulations enforcing the Fair Labor Standards Act (“FLSA”) to increase the number of people who should receive overtime pay. The FLSA is the federal law that establishes the minimum wage and requires that certain employees receive overtime pay at time and one-half their regular rate for all hours worked over 40 in a week.
Currently, businesses do not have to pay certain employees overtime if their job duties qualify them for an exemption, such as the “executive” exemption, which generally applies to employees who supervise the work of others. Since it is unlikely that Congress could pass legislation to actually change the FLSA itself, it appears that President Obama plans to use his executive authority to direct the DOL to change the FLSA regulations instead. His directions are expected to include, among other things, changes to the executive exemption so that fewer employees qualify for the exemption and, as a result, will have to be paid overtime.
The Washington Post, USA Today, and CNN also have reported on this issue. More details are sure to follow, but there is likely going to be a lot of disagreement over these moves in the weeks and months ahead.