Whether or not an employer must pay a worker overtime wages for working more than 40 hours per week depends on a complex series of rules. These rules, which determine which workers are “exempt” from overtime — that is, which workers must be paid time-and-a-half after 40 hours (“non-exempt” workers) and which workers don’t have to be paid extra (“exempt” workers) — may be about to change by the federal Department of Labor (DOL). The implications for the labor market could be quite profound.
The “White Collar” Exemption
One set of rules, aimed at white collar workers, hinges, in part, on the amount of a worker’s annual salary. Currently, federal law classifies workers as exempt (not having to be paid overtime) if these two conditions are met: (1) they receive a salary (not an hourly wage) that is at least $23,600 per year ($455 per week), and (2) their job is primarily executive, professional, or administrative. Recently, the DOL has proposed raising that minimum salary.