President Obama announces overtime expansion proposal

“We’ve got to keep making sure hard work is rewarded. Right now, too many Americans are working long days for less pay than they deserve. That’s partly because we’ve failed to update overtime regulations for years — and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work.”

With those words, President Obama on June 30, introduced his plan to expand the eligibility for overtime compensation to an estimated 4.68 million white-collar workers. Workers who earn less than $970 per week, or $50,440 per year, would have to be paid overtime even if they are classified as a manager or professional, according to details announced by the U.S. Department of Labor (DOL). That is an increase of more than double the current salary threshold of $455 per week or $23,660 per year, which has been in place since 2004.  In addition, the DOL intends to increase that minimum threshold amount annually in order to keep pace with inflation.

These changes are expected to cost retailers and restaurants millions of dollars as they “hollow out” low- and mid-level management positions, according to the National Retail Federation, by forcing employers to increase salaries so that managerial employees can keep their exempt status.  In addition, employee morale is expected to take a hit as some employees may feel they are being demoted as they are reclassified from exempt to non-exempt.

In the States in which our firm practices, this will affect an estimated 70,000 employees in Alabama, 370,000 in Florida, 40,000 in Mississippi and 120,000 in Tennessee.  That is a total of 600,000 employees in our four States alone.

Linked for your reference are the official DOL 2015 Overtime Changes Fact Sheet and Frequently Asked Questionspublications.  Please do not hesitate to contact Carr Allison’s Labor and Employment Lawyers for more information and to discuss your options for opposing this new legislation.

News

Miller and Muhonen Obtain Dismissal

Chancey Miller and Stephen Muhonen of our Chattanooga (TN) office succeeded in obtaining the dismissal of a significant security case for a retail client. In a case where a convenience store employee was assaulted while confronting a shoplifter, allegations were that the retailer failed to provide proper security which was an […]

Learn More

Sausaman Prevails on a Motion for Summary Judgment

Alison H. Sausaman of our Jacksonville (FL) office prevailed on a motion for summary judgment in federal court on behalf of a national convenience store chain. The court agreed that rain on an asphalt parking lot was not a dangerous condition and granted final judgment in our client’s favor.

Learn More

Baggett and Ingram Prevail on a Motion for Judgment

Evan Baggett and Josh Ingram of our Birmingham (AL) office recently prevailed on a motion for judgment on the pleadings in a complex tort case. After extensive briefing and oral arguments, the court granted their motion and dismissed all the plaintiff’s claims with prejudice.

Learn More