What you need know about the FLSA Proposed Rules

The Department of Labor (DOL) has issued several new rules concerning the Fair Labor Standards Act (FLSA). While these rules have not yet been become effective, they signal a change in the way the FLSA will be interpreted in the future, and may have a significant impact on many workers, including their right to overtime pay and wages.

One of the main changes has been to propose an increase to the “salary basis” threshold for allowing a worker to be considered an “exempt” employee. If you are considered exempt, you generally are not entitled to earn overtime compensation, regardless of the number of hours worked. On the other hand “non-exempt” employees may receive overtime pay at the rate of one and one-half times their regular rate of pay for time spent in excess of 40 hours in any one work week. The threshold has been set at $455, making several lower wage earners “exempt” and denying them the chance to bring home extra money each month. The new proposal seeks to raise this threshold to $970.

Another proposed change is who may be considered an independent contractor v. an employee. The test for making this determination has shifted, with the DOL concluding that most workers are employees under the FLSA’s broad definitions.

A third change affects the test to determine the circumstances under which an intern can be “unpaid.” While a new test has not been adopted, the current 6 factor test has been called “too rigid” and courts are calling for a more flexible approach – called the “primary beneficiary test.” This test focuses on what the intern receives in exchange for his or her work rather than strictly following the 6 factors.

If you have questions concerning how any of the changes may affect you or if you have any other wage and hour questions, please contact the experienced Atlanta wage and hour lawyers at Buckley Bala Wilson Mew LLP for an immediate case evaluation.