Proposed Rule Would Loosen Overtime Exemptions

Some federal workers will have the opportunity to collect overtime if a proposed U.S. Department of Labor rule is implemented.

The Obama Administration is supporting the measure, with the president suggesting he will use his executive authority to loosen overtime exemptions that prevented hundreds of thousands of federal workers from being able to collect overtime.

The Labor Department has proposed increasing the salary in which the exemption goes into effect — meaning a worker cannot collect OT — from $23,660 annually (or $455/weekly) to $47,892 annually (or $921/weekly).

So if a worker’s salary, or weekly pay, falls below that new upper threshold, they will be able to earn overtime for additional hours on the job if this proposed rule is implemented.

“The Department is proposing to update the regulations governing which executive, administrative, and professional employees (white collar workers) are entitled to the Fair Labor Standards Act’s minimum wage and overtime pay protections,” according to a fact sheet posted on the Labor Department’s website.

“With this proposed rule, the Department seeks to update the salary level required for exemption to ensure that the FLSA’s intended overtime protections are fully implemented, and to simplify the identification of nonexempt employees, thus making the executive, administrative and professional employee exemption easier for employers and workers to understand and apply,” according to the fact sheet.

There are a few nuances to how the government treats overtime pay. We encourage you to read the fact sheet to gauge the rule changes against your particular salary and work situation.

Roughly 365,000 federal workers earn an annual salary between $30,000 and $50,000, according to Government Executive, citing U.S. Office of Personnel data. They would receive additional pay for extra hours on the job under the proposed rule change.

Currently, the Department of Labor has three key rules on the books that exempt white collar federal workers from receiving overtime. As quoted from their website, they are:

(1) The employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed;

(2) The amount of salary paid must meet a minimum specified amount;

(3) The employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations.