Violations of the Fair Labor Standards Act Cost Employers Over $355 Million in the Past 2 Years

Most reports of violations are filed by disgruntled employees, and misclassification will prove even more costly when new overtime guidelines become effective on August 23rd

The regulations increase the minimum salary for overtime pay to $455 weekly or $23,660 annually. Employees who earn between $23,661 and $100,000 will be eligible for overtime unless they are exempt under one of the new standard duties tests. Employees who earn more than $100,000 are exempt if they perform at least one exempt duty.

The status of white collar employees is determined by their duties. Exempt executive and managerial employees regularly direct the work of 2 or more employees and can hire and fire. Administrative employees are exempt if they exercise discretion and independent judgment in significant matters. Exempt professional employees perform work requiring advanced knowledge, invention, imagination, originality or talent. Employees whose primary responsibility involves outside sales are also exempt.

Employers must pay exempt employees their full salary regardless of number of hours worked during that pay period or the quality of the work.

For further clarification, visit the Department of Labor web page www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm.