New Overtime-Pay Rule Expected to Swell Payroll Costs and Increase Wage and Hour Lawsuits

For the first time since 2005, the United States Department of Labor has issued an updated regulation automatically extending overtime pay eligibility to 4.2 million “white collar” workers previously exempted from the Fair Labor Standards Act overtime pay requirements. The updated regulation is almost certain to swell payroll costs and increase wage and hour lawsuits.

Under the current regulations, a “white collar” worker, otherwise meeting the standard duties test to be considered exempt from overtime, must be paid a salary of $455 per week ($23,660 annually for a full-year worker). The updated regulation more than doubled the minimum salary required for an employee to be exempt from overtime (to $913 per week, $47,476 annually for a full-year worker).