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Obama Seeks to Expand Overtime Coverage to Previously Exempt Employees

Posted by Marc Smith | Mar 14, 2014 | 0 Comments

On Thursday March 13, 2014, President Obama ordered the U.S. Department of Labor to revise applicable regulations governing overtime pay to expand eligibility for potentially millions of employees to receive overtime pay when they work in excess of 40 hours in any given week.

According to the Obama White House, as many as 88 percent of salaried workers are not guaranteed overtime pay (i.e. time and one-half of a worker's regular rate of pay) because they supervise (even if minimally) other employees and earn more than the current cap of $455 a week.   Under current regulations, these workers can be denied overtime pay — typically under the so-called “white-collar” exemption no matter how many hours they work each week. Thus, the “working supervisor” can be forced to work significant overtime (i.e. more than 40 hours per week) without receiving any additional compensation provided he or she makes a salary of at least $455 per week.

Although the winds of change are blowing, Obama's order does not prescribe a new salary threshold, and it does not take effect immediately. Instead, he has instructed Labor Secretary Thomas E. Perez to come up with a plan that would expand the number of workers eligible for overtime pay. During a period of public comment, business groups will almost surely seek to dramatically scale back this initiative by limiting the number of employees who might benefit from the change.

About the Author

Marc Smith

Marc J. Smith is a Rockville, Maryland employment attorney and a founding member of the law firm formerly known as Smith, Lease & Goldstein, LLC. In 2018, after 18 years managing Smith, Lease & Goldstein, LLC's employment counseling and litigation practice, Marc launched his own boutique practice...

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Representation Of Employers And Employees

The Law Office of Marc J. Smith, LLC is a boutique employment law practice based in downtown Rockville, Maryland near the Montgomery County Circuit and District Courts. The Firm’s practice focuses exclusively in the employment law arena and provides counseling, litigation and a wide range of other employment-related services to employers and employees throughout the State of Maryland, Washington D.C. and other jurisdictions. The Firm also represents individuals who have failed to register with the Selective Service System and who are trying to apply for or maintain federal employment.

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