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Things Workers and Employers Need to Know About the New Overtime Rules

The clock is ticking down on the Labor Department’s new overtime rules, which take effect December 1. In a nutshell, a significant percentage of Long Island workers are either due a salary increase or will be eligible for overtime.

The rule was finalized in May 2016, and basically raises the so-called “white collar overtime exceptions” from $455 per week to $913 per week, an amount comparable to the 40th percentile of salaried workers’ earnings. Beginning on January 1, 2020, the threshold automatically goes up once every three years. The new rules also change the threshold for Highly Compensated Employees to the 90th wage percentile, which is currently $134,004.

President Obama declared that the new rules mean that workers will receive “a fair day’s pay for a hard day’s work.”

Overtime Rules

Currently, all salaried “white collar” workers who meet certain qualifications and earn more than $455 a week ($23,660 a year) are not entitled to overtime. According to the Department of Labor, these classifications are:

  • Executive: Employees who “customarily and regularly direct the work of at least two or more other full-time employees or their equivalent” and who have some bearing on entry and exit-level decisions are exempt employees. This category has been criticized by some, because some employees are classified as “supervisors” or “managers” even though they have almost no independent authority.
  • Administrative: Receptionists, typists, secretaries, and other traditional office support positions that do not involve manual labor are exempt.
  • Professional: If job qualifications involve “a prolonged course of specialized intellectual instruction” and job duties entail “the performance of work requiring advanced knowledge,” the position is overtime-exempt.
  • Computer: A programmer, analyst, software engineer or “or other similarly skilled worker in the computer field” is not entitled to overtime.
  • Outside Sales: As the name implies, these employees must spend most or all of their time in sales and work offsite.

These overtime rule designations do not apply to “blue collar” workers “in production, maintenance, construction and similar occupations” or first responders and related professions.

While the occupational definitions remain the same, the wage cutoff is now $47,476 a year. In the next few months, it would behoove workers to keep track of their actual hours worked to determine whether it would be more beneficial to increase their flat salaries to the new exemption level or stay at their current pay rates and be eligible for time-and-a-half for hours in excess of 40 per week.

Other Current Trends

While the Labor Department is changing wage/hour rules, the Equal Employment Opportunity Commission is interpreting Title VII of the Civil Rights Act very broadly. This provision forbids discrimination in employment based on a wide array of factors, including race, age, national origin, and gender. Although the language is silent as to sexual orientation, and a federal appeals court has never interpreted it in this way, the EEOC recently settled a sexual orientation discrimination case with a Baltimore company. Observers believe that an expansion to include gender identification may not be far behind.

In recent years, the National Labor Relations Board has also been very aggressive in this area, consistently siding with workers on issues like employee manuals, Section 7 protected activities, and terms of employment.

Generally speaking, the employer-employee legal and financial climate is currently worker-friendly. For a free consultation with an experienced Long Island employment lawyer who stands up for your legal and financial rights, contact the Law Office of Cohen and Jaffe, LLP. After-hours visits are available.

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