Karla's Musings

New Overtime Salary Test Has Huge Implications

The activist Obama administration is working Overtime!  The DOL has proposed a new Salary Test Level for determining exemption from the FLSA.  This means employees making less than a certain salary amount are eligible for overtime pay.  This also means they have to report their hours, receive permission from supervisors to work outside of normal hours, and maybe even punch a time clock.  Oh Goody!  Employees will consider this insulting who are currently classified as exempt (paid salary), have gone to college and are working in a “learned profession”.  According to the FLSA:  “The job duties of the traditional “learned professions” are exempt. These include lawyers, doctors, dentists, teachers, architects, clergy.”  Currently, if their salaries fall below the $23,600 per year level, they are non-exempt. If the salary level test is raised to $50,440, many professional currently exempt positions will have to be classified as non-exempt and subject to overtime pay. Exemption is not determined by job title. Exemption is not determined by salary level. Exemption is not determined by hourly or salaried administration of payroll. Exemption is determined by thorough job analysis to verify the types of duties that meet the Duty Test of the FLSA. If the Salary Level is raised to $50,440, a load of professional jobs will be swinging over to the non-exempt category. This is particularly problematic for employees and employers today with the advent of cell phones and the internet, making work duties easier to perform anywhere and anytime. And if employers think they will just raise salaries to the $50,440 level — think again — remember that the new employee with six months of experience may now be making the same as the five year experienced employee.  Internal equity within an organization is extremely important to job satisfaction.  The latest study on workplace satisfaction clearly showed that employees value being respected and appreciated more than money.  And to further lament this proposed change, it is also being considered that employers with more than five FLSA infractions will lose their federal contracts.  Who does that hurt?  Workers! Employees! People! Our Human Resources!