DEPARTMENT OF LABOR PROPOSES TO EXPAND FEDERAL OVERTIME PAY REGULATION
August 10, 2015
The Department of Labor has unveiled a proposed rule that would broaden federal regulations regarding overtime pay. The proposed rule would raise the salary threshold to qualify for a “white collar” exemption under the Fair Labor Standard Act (FLSA) to $50,440 per year and could affect foreign airlines operating to the United States. Under the FLSA, employers must pay their employees at least the federal minimum wage ($7.25 per hour) for their hours worked, unless the employees are exempt from the minimum wage provisions of the FLSA. The exemption covers certain employees of airlines subject to the provisions of Title II of the Railway Labor Act. The FLSA exemption, however, is not available to an airline’s airport and flight personnel if they devote more than 20 percent of their time to activities unrelated to transportation activities, such as flight instruction and sales of planes or parts.
The Department of Labor expects that the proposed rule would automatically and immediately switch almost five million people to nonexempt status, and result in approximate $1.5 billion in additional overtime compensation in the first year and an average of about $1.2 billion in new overtime pay in each of the following nine years.
The deadline for public comment on the proposed rule is September 4, 2015. If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665)).