Do your supervisors make $50,000?

by: Henry Meier

If not, then they can no longer be classified as exempt employees and must get overtime. According to this morning’s news reports, that’s the core part of proposed regulations updating the Fair Labor Standards Act to be released by the Obama Administration’s Department of Labor later this week.

Under existing regulations, one of the conditions for an employee to be classified as exempt is that he or she makes a little more than $23,000. Critics point out that this threshold requirement is so low that it has allowed employers to contravene the intent of federal law by classifying an employee as the supervisor and expecting them to work 50-60 hour weeks without overtime pay. They argue that a $50,000 threshold simply adjusts the Act to where it would be had it kept pace with inflation.

Opponents of this well-meaning but fatally misguided view correctly point out that a $50,000 threshold won’t increase the salary of many employees, but simply decrease the amount of hours existing employees work and, in a best case scenario, encourage the hiring of more lower-paid employees.

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