In 1938, President Franklin D. Roosevelt championed and signed the Fair Labor Standards Act of 1938.
In doing so, he argued that “All our able bodied working men and women deserve a fair day’s pay for a fair day’s work.”
The FLSA banned certain child labor practices, set a minimum hourly wage of 25 cents and set the maximum work week at 44 hours. I’ll save you the math –– that’s $11 a week.
The law has changed a bit over the years, but the changes have been less significant than those made to other depression-era laws.
For starters, the federal minimum wage today is $7.25 per hour and many states have imposed higher minimum wages. In Florida, the minimum wage is $8.05 per hour.
Furthermore, employees may work more than 44 hours a week as long as non-exempt (hourly) employees are paid time-and-a-half for all hours worked in excess of 40 hours in any given work week.
On Dec. 1, some of the most drastic changes to the FLSA since 1938 will go into effect.
The changes relate to the payment of overtime and the salary requirements of exempt-salaried employees.
Every employee in the U.S. is classified as either an exempt or non-exempt employee. Exempt employees are immune from the overtime requirements of the FLSA.
Most employees are covered by the FLSA and it is expected the changes in the FLSA will reclassify at least 4 million workers from exempt to non-exempt. In other words, 4 million workers who were not previously eligible for overtime compensation will become eligible.
Here’s a summary of the changes:
• The preliminary threshold test to be exempt from overtime payment is that an employee must earn a minimum of $913 per week or $47,476 annually.
This is more than double the $455 weekly, or $23,660 per year, in effect since 2004.
• In addition to meeting the minimum salary requirement, the employee must also pass a duties test.
In order for an employee to be exempt from the duties test as a highly compensated employee, he or she must make more than $134,004 annually and pass a minimal duties test. This amount represents the 90th percentile of full-time salaried employees nationally.
• Minimum salary and highly compensated employee levels will be adjusted every three years in order to keep up with inflation. Therefore, expect the numbers to increase in 2019.
If you are a lawyer, don’t get too excited.
Teachers, lawyers and doctors are exempt from the salary and salary basis requirements of the FLSA, along with a few others.
In fact, a lawyer need not be paid a minimum of $913 per week. If the lawyer is paid hourly and works more than 40 hours in a week, he or she can be paid the base hourly wage for all hours worked.
What has not changed and may cause confusion for many legal practitioners is that paralegals and administrative assistants, regardless of how much they are paid, are subject to the FLSA.
You should maintain accurate time records on all non-lawyers in your practice and ensure they are paid for all hours worked.
I suspect that what side of the political equation you are on will dictate whether you agree with these changes.
If you have been improperly classifying your employees, you will want to add this to your already lengthy holiday to-do list and make the necessary changes in short order –– most certainly by Dec. 1.
Michelle Bedoya Barnett is a founding shareholder with Alexander DeGance Barnett, practicing in education, labor and employment law.