President Obama seeks to change federal overtime law

President Obama intends to direct the Department of Labor to significantly change the Fair Labor Standards Act (FLSA) regulations that relate to overtime exemptions so that a larger number of employees will qualify for overtime pay.  While the details of the intended revisions have not yet been announced, it is reported that Obama will be urging at least two major changes: (1) an increase in the amount of minimum compensation that must be paid to an employee in order for the employee to qualify for exempt status (the minimum currently is $455 per week under the FLSA [please note: in California it is $640 already, so it may not represent a big change for California employees], and Obama is expected to direct that the minimum be substantially increased, with some urging that it be doubled); and (2) replacing the FLSA “primary duty” test with a more quantitative test that requires an employee to spend a certain percentage of his or her time (likely at least 50%) on exempt duties in order to qualify for exempt status. These changes would substantially increase the number of employees who qualify for overtime pay under the FLSA.


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