New Labor Rules Bring Overtime Pay To Millions Of Salaried Employees

Let’s say you’re an assistant manager at a fast-food restaurant making a salary of $35,000 per year. Your restaurant is drastically understaffed, and even though you work up to 20 hours of overtime per week, you don’t receive any additional compensation for the extra hours. Is this OK?

Somewhere between 4.5 and 12.5 million Americans find themselves in a similar situation every week. Under the current Fair Labor Standards Act, salaried workers making more than $23,660 per year are not eligible for overtime pay if their jobs include some traditionally “white collar” duties (such as restaurant management).

New rules announced on May 18 by the Department of Labor will change that. Starting December 1, 2016, salaried employees who make less than $47,476 per year will be eligible for time-and-a-half overtime pay when they work more than 40 hours in a week. The new rules also include a system that will automatically increase the salary threshold every three years, meaning that, in the future, even more employees will qualify for overtime pay.

To comply with the new regulations, your employer may choose to do one of three things:

  1. Your employer may begin paying you time-and-a-half for your overtime.
  2. Your employer may raise your salary above $47,476.
  3. Your employer may limit the amount of hours you can work to 40 hours per week, increasing the amount of time you have to spend with family or on additional training.

Importantly, if you currently earn regular bonuses or performance incentives, your employer may choose to use that money to satisfy up to 10 percent of your new overtime pay.

If you are a salaried employee and are not used to keeping track of your hours, you may have questions about how your wages will be paid after December 1. You should seek the advice of counsel to determine whether you are eligible for overtime pay, and when the time comes, whether your employer is compliant with the new rules.




Since 2008, the Federal minimum wage has remained at $7.25 an hour. Since that time, however, inflation has continued to rise, with a cumulative rate of 10.7%. Simply put, the current minimum wage isn’t as effective in reducing poverty and increasing the standard of living for workers as it once was. While the costs of goods and services have risen steadily over the years, wages for low income workers have remained stagnant, resulting in increased hardship for those in our communities with the least opportunities.

Members of the Louisville Metro Council, however, are taking steps to alleviate this predicament, introducing a proposal to raise the minimum wage for workers in Jefferson County to $10.10 an hour by 2017.

From the Courier-Journal:

As drafted, the ordinance — sponsored by [Councilwoman Attica] Scott and fellow Democratic council members Barbara Shanklin (2nd), Cheri Bryant Hamilton (5th), David James (6th) and Tom Owen (8th) — would boost the mimimum wage to at least $8.10 an hour on July 1; $9.15 on July 1, 2016; and $10.10 by July 1, 2017.


“Costs for gas, groceries, everything continue to rise. Everything has gone up, except wages,” Scott said. “The economic recovery has not helped people at the bottom.”


She said the higher guaranteed wage would increase consumer purchasing power and thus help business.

This proposal follows on the heels of a recent push by the Obama administration to raise the Federal minimum wage in order to curb the growing gap in income inequality. On September 1, the President renewed his call to raise the Federal minimum wage at a speech in Milwaukee, Wisconsin. President Obama challenged Congress to enact legislation that would echo his recent executive order requiring Federal contractors to pay employees a minimum of $10.10 an hour. That executive order, which was issued by President Obama in February of this year, applies to new contracts entered into with the Federal government after January 1, 2015, as well as replacements for expiring contracts.

All of these developments point to good news on the horizon for low income workers: wages will be increasing soon. It’s likely only a matter of time.

We’ll keep you updated as these events develop further.


House Bill 1 to Increase Kentucky’s Minimum Wage to $10.10 Has Won Committee Approval, Long Road Ahead in the Senate

House Speaker Greg Stumbo won committee approval today of his bill to increase the minimum wage from $7.25 an hour to $10.10.  This would reportedly affect the wages of 391,000 Kentuckians who currently make less than $10.10 an hour. House Bill 1 proposes to implement this change over three years, and the bill would not apply to any business with annual gross sales of $190,000 or less. Although the bill is expected to pass the full house vote, its chances in the Republican-controlled Senate are unclear, at best. Kentucky last raised the minimum wage on July 1, 2009, which increase has been eroded by cost of living inflation.