In late November, a federal district court in Texas enjoined the Department of Labor from implementing and enforcing a new rule that would have made it more difficult for employers to claim that workers do not qualify for overtime pay. But the Texas court may not have had the power to apply its order nationwide, and Massachusetts employees may still be able to collect overtime under the new rule.
Under the Federal Labor Standards Act, every employee must be paid a minimum hourly wage. Employees are also entitled to overtime pay at one and a half times that rate for all hours worked above forty per week. However, the statute exempts certain types of jobs from the requirement to pay overtime. One of those exemptions is for any work done in a “bona fide executive, administrative, or professional capacity,” and is sometimes referred to as the “white collar exemption.” The statute grants the Department of Labor the authority to issue rules defining what exactly qualifies as a “white collar” job. Since 1940, the Department has defined the exemption, in part, by setting a minimum salary cap under which all workers must be paid overtime – in other words, anyone paid less than that set figure cannot qualify as an exempt “executive, administrative, or professional” employee. In 2014, after extensive notice and comment from outside stakeholders, the Department of Labor raised the salary cap from $23,660 to $47,476. The rule was set to go into effect on December 1, and experts estimated that more than 4 million additional workers would now qualify for overtime pay. Continue reading