The White House confirmed yesterday that the Department of Labor will release the new Federal Overtime Regulations today. The President detailed significant changes in the law at a briefing yesterday. The new regulations are designed to increase income for millions of low to mid-income workers across the country. Many business and professional organizations believe the new federal overtime regulations will lead to demotions and tighter workplace controls on overtime. San Diego employers must be cognizant of the recent wave of unpaid overtime litigation and the sharp increase in the volume of these cases over the past few years.
Presently, employers are required to pay overtime to those who make less than $11.38/hour, $455/week or $23,660/year unless they fall into specific categories as “exempt” employees such as an administrative assistant to an executive, executive or management work, and those who provide “professional” services. The new regulations will more than double that minimum to $24.25 an hour, $970/week or $50,440 annually.
Department of Labor Secretary Thomas Perez noted the original overtime regulations were designed to exempt high salaried executives. He expressed concern that “low-level retail supervisors and entry-level office workers who often toil 50 to 70 hours a week” have paid a stiff price. “Too few people are getting the overtime that (federal law) intended,” he told reporters. “It’s simply not right.”
Vice President Biden added that the new regulations are part of the White House plans of “restoring and expanding access to the middle class. The middle class is getting clobbered.”
How will the new federal overtime regulations affect San Diego employers and what action should you take? It will take a little time to unpack the new regulations once they are published today, and there should be a period of a few months before they take affect. Based upon what is available today and the details outlined at the White House yesterday, it is apparent that employers will need to make significant and substantive changes to many internal documents and policies, from the employment contract itself, through employee and company policies and procedures.
It will become extremely important to develop tight internal controls on hours worked, access to company systems after work hours, and the specific methods used to capture the amount of time worked by each employee each day. Employees may need to have more responsibility on how they report hours worked, and to provide enforceable assurances that they are not being intimidated, forced or encouraged to work outside of regular hours. Policies and procedures must be updated, well communicated and strictly and consistently enforced.
These are challenging times for San Diego employers. The new federal overtime regulations will forever change the landscape of how workers are paid, and the cultures surrounding work and advancement within San Diego companies. How will your business adapt? We invite you to contact the experienced “lawyers for employers” at the Watkins Firm for a substantive and free consultation at 858-535-1511. Together, we will review existing practices and documentation, compliance with the substantial 2016 changes in employment law and develop a strategy to protect your business and come into compliance.