Under the U.S. Fair Labor Standards Act, certain “white collar” workers (i.e.,   executive, administrative, and professional employees)   are not entitled to receive (and the employer is not required to pay) overtime for hours worked in excess of 40 hours per week.  Since 1940, the Department’s regulations have generally required each of three tests to be met for one of the FLSA’s white collar exemptions to apply: (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 (currently, $455 per week – $23,660 annually); and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations.

The Department of Labor is now proposing to update this law to provide that in order to be considered “exempt,” white collar workers must receive at least $970 per week ($50,440 annually), beginning in 2016. It is expected that this change in the law will allow  5 million workers to receive overtime who were previously exempt.

As with all proposed rules of this type, the Department of Labor is asking for feedback from individuals and businesses — no later than September 4, 2015. Click here to comment on the proposed rule change.