By: Scott J. Connolly and Sandra E. Kahn
On November 22, a federal judge in Texas issued a preliminary order that temporarily blocks the U.S. Department of Labor (DOL) from implementing changes to the salary basis for white collar overtime exemptions. The new salary rule, which was to become effective on December 1, 2016 would have required employers to increase exempt employees’ minimum salary from $23,660 to $47,476. The preliminary court order blocking the rule appears to apply to all public and private employers nationwide.
Find out how the judge’s order will affect the new salary rule, which was to become effective on December 1. Read this month’s Employment Law Alert.
By: Sandra E. Kahn
On December 1, 2016, any employees who earn less than $47,476 annually will be entitled to overtime and must be treated as non-exempt, as per the U.S. Department of Labor’s final rule (“Final Rule”).
Don’t wait any longer to address this critical change in the law.
Find out how the Final Rule will affect your current employee classifications and pay practices, and the consequences of not complying with the law.
Read this month’s Employment Law Alert.
By, Sandra E. Kahn
On May 18, 2016, President Obama announced the publication of the U.S. Department of
Labor’s final rule (“Final Rule”) updating the overtime regulations, and providing that employees who earn less than $47,476 annually will be entitled to overtime.
The federal Fair Labor Standards Act (“FLSA”) “white collar” exemptions are familiar to most employers. Under the FLSA, employees must be paid the minimum amount required by the statute on a salary basis, and the employee’s job duties must primarily involve executive, administrative, or professional duties. The Final Rule changes only the salary basis test, leaving in place the existing duties test.
Significant Amendments To The Overtime Regulations Proposed By The DOL Will Result In Many More Workers Becoming Entitled To Overtime
If the U.S. Department of Labor’s (DOL) proposed rule is adopted, any exempt employees who earn less than $50,440 per year will need to be reclassified as non-exempt. These employees will now earn overtime if they work over 40 hours per week.
This proposal would increase the salary level required significantly in order for the employee to remain qualified for the “white collar” exemptions.
To learn more about this proposal and how it may affect you if it goes into effect, please read our full Employment Law Advisor.
A common misconception is that paying a salary to an employee makes the employee exempt from the overtime requirements of the Fair Labor Standards Act (FLSA). In reality, many salaried employees do not qualify for any exemption from overtime obligations, and relying solely upon whether employees are paid a salary in classifying them as exempt or nonexempt will almost certainly result in misclassifications. In this video Massachusetts Employment Lawyer Maura E. Malone discusses the process of determining whether your employees are exempt or non-exempt and the risks of failing to properly classify them.
Want more information? Try some of our other resources on this topic:
- Wage & Hour Tip: Salaried Does Not Necessarily Mean Exempt From Overtime
- Caution: Administrative Assistants Only Rarely Are Exempt From Overtime Pay
- What Does Paid “On A Salary Basis” Mean?
- New Treble Damages Requirement Makes Compliance
with Wage/Hour Laws Even More Critical
- Wage & Hour Tip: Certain Bonuses Must Be Included
When Calculating Overtime Pay
Please feel free to contact any member of our Employment Law Group with any questions on Massachusetts wage payment laws.
MBBP’s Employment Law Clip Series provides quick, easy-to-digest snapshots of common Employment issues, as well as practical information on how to avoid complicated, expensive and time-consuming pitfalls. Stay tuned for the next topic on Restrictive Employment Agreements.
Many employers use commission payments to increase the productivity of their sales force. Commissioned sales people can earn significant compensation. But, are commissioned sales people also entitled to minimum wage and overtime?
The federal Fair Labor Standards Act(FLSA) establishes a minimum wage and requires that employers pay overtime, or 1.5 times the employee’s regular rate of pay, to employees who work more than 40 hours in a workweek. The FLSA’s minimum wage and overtime requirements apply to all employees, including commissioned employees, unless the employee comes within one of the statutory exemptions to the FLSA.
Many commissioned sales employees come within one of two statutory exemptions to the FLSA, the “outside sales exemption” or the “inside/retail sales exemption.” An employee is exempt under the outside sales exemption if the employee’s primary duty is making sales or obtaining orders or contracts for services or the use of facilities from paying clients or customers, and the employee is customarily and regularly engaged away from the employer’s place of business. Qualified outside sales people are exempt from both minimum wage and overtime requirements.
Commissioned sales people employed by a retail or service establishment are exempt from overtime (but not minimum wage) under the inside/retail sales exemption if (1) the employee’s regular rate of pay (including commissions) exceeds one and one-half times minimum wage and (2) more than half the employee’s total earnings are in the form of commissions.
If a commissioned sales employee does not come within one of these two narrowly defined exemptions (sales people will usuallynotqualify for other FLSA exemptions) the sales employee is not exempt and is entitled to overtime on top of commissions.
For help determining whether your sales force is exempt, or for more information on this topic, please contact a member of our Employment Law Group.