Over the last several months, President Obama has continued his push to revamp the nation’s minimum wage and overtime laws. He has faced an uphill battle.
In a Presidential Memorandum dated March 13, 2014, President Obama directed the Department of Labor to “propose revisions to modernize and streamline the existing overtime regulations” under the Fair Labor Standards Act, which the President characterized as “outdated.” The Department of Labor is believed to be considering revisions that would, among other things, update the current $455 per week salary threshold ($23,660 annualized) for the “white collar” professional, executive, and administrative exemptions. That $455 per week threshold has not increased since 2004.
Apparently, the U.S. Congress does not want to wait for the Department of Labor to act (perhaps because the Department of Labor’s “notice and comment” rulemaking process could take a year or more). Last week, a group of Democratic U.S. Senators introduced the “Restoring Overtime Pay for Working Americans Act” as an amendment to the FLSA. If passed, the bill would:
- increase the salary level for the “white collar” professional, executive, and administrative overtime exemptions, over a period of 3 years, from $455 to $1,090 per week ($56,680 annualized), and thereafter by the annual percentage increase in the Consumer Price Index;
- increase the compensation level for the “highly compensated employee” exemption, over a period of 3 years, from $100,000 to $125,000 per year, and thereafter by the annual percentage increase in the Consumer Price Index;
- revamp the “primary duty” test for the “white collar” exemptions so that an exempt employee may not spend more than 50% of his/her work hours each workweek on non-exempt duties; and
- permit the Department of Labor to assess monetary penalties for violation of the FLSA’s recordkeeping requirements.
As for the federal minimum wage (currently $7.25), President Obama has been pushing hard for $10.10 per hour. There has been little traction for change at the federal level, but many states and cities recently have increased their minimum wage rates.
Just last week, President Obama praised Massachusetts lawmakers for raising that state’s minimum wage to $11.00 by 2017. Hawaii, Maryland, and Connecticut approved gradual increases to $10.10. Vermont approved a gradual increase to $10.50. The city of Seattle even approved a gradual increase to $15.00 (but that increase recently has been challenged in a federal lawsuit).
Here in Florida, the minimum wage remains $7.93. Florida’s minimum wage is subject to adjustment annually (effective each January 1) based upon any increase in the rate of inflation.
We’ll have to keep an eye on the minimum wage and overtime developments over the next several months. My guess is that there will continue to be more “action” at the state level than the federal level, at least in the short term. Perhaps at some point down the road the federal minimum wage will be raised and the Department of Labor will revamp the minimum wage and overtime exemptions.