The U.S. Labor Department on Wednesday issued the final version of the overtime exemption rule raising the minimum salary threshold to qualify for the Fair Labor Standards Act's white collar exemption. Here, attorneys, including DWT Partner Mike Killeen, tell Law360 why the new rule is significant.
Mike's quote: "The DOL’s final regulation is a form of wage control that will have an immediate, traumatic effect on small businesses, nonprofits, higher ed, public agencies, local businesses and other organizations that have no excess revenue to pay for these changes. Consequently, they will be forced to reduce compensation rates, work hours, services and benefits to insure they can comply in a cost neutral way. In the process, many formerly exempt employees will view conversion to non-exempt status as a ‘demotion,’ thus creating significant employee relations and payroll administration issues, which is a lose/lose proposition. To the extent that it doesn’t have immediate traumatic impact on all employers and employees, this regulatory change creates a chronic condition with pernicious effects, including increased wage/hour litigation, that will not be apparent for several years at which time it will be so much a part of the regulatory web it will be hard to untangle."