On Dec. 1, new federal regulations will go into effect that could occasionally increase the paychecks of 4.2 million workers, including more than 330,000 in Florida.
And the changes could have a significant impact on the legal profession.
Amendments to the Fair Labor Standards Act will make people earning less than $47,476 a year ($913 per week) eligible for overtime pay, doubling the $455 per week, $23,660 annual salary threshold that’s been in effect since 2004.
“A lot more people will be eligible for overtime,” said Tad Delegal, an attorney certified by The Florida Bar in labor and employment law as well as state and federal administrative practice.
The new regulations won’t directly impact attorneys’ compensation because they fall under the “white collar” exemption in the law.
The exemption covers administrative, computer-professional and executive employees.
That includes legal assistants and paralegals.
“It’s going to change the game for a lot of people,” Delegal said. “Paralegals are generally entitled to overtime, but a lot of firms don’t pay it.”
In addition to more employees qualifying for overtime, the new rule could result in some people receiving an increase in salary.
According to a report published by The Florida Bar, if a law firm deems its office manager or network administrator exempt under the exemption, it must ensure the employee’s salary meets the new minimum salary level.
Further, many firms treat their managers as exempt under the executive exemption because they supervise two or more employees, the report states.
Since such managers often work more than 40 hours in a week to complete their duties and are paid less than the new threshold, their employer will have to consider options, such as raising the employee’s salary to $913 a week or pay the employee hourly and pay time-and-a-half for each hour beyond 40 in a workweek.
It’s noted that employers who choose that approach may set the hourly rate to make sure the anticipated amount of straight time and overtime earnings will approximate the employee’s previous salary.
A third option is what’s called a “fluctuating workweek.”
In that case, an employee could remain on salary and the employer would pay overtime for each overtime hour worked.
The employee would receive the same salary even if he or she does not work 40 hours in a week.
That plan also offers the employer the option to pay a half-time premium for overtime hours worked.
“It’s a complicated process,” and the employer and employee would have to agree to the terms, Delegal said.
The new rules could lead to more litigation, he said, because more employees will qualify for overtime and they will be more aware of the change.
Delegal said with less than four months for employers affected by the change to come up with a plan, it’s time to consider the options available.
“Businesses need to understand what they have to do – and do it,” he said.
For more information, visit the federal wage and hour website at dol.gov/whd/.
The Florida Bar Practice Resource Institute also has information about the new law at floridabar.org/pri.
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