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Exempt Labor Law Changes: What to Expect

What changes are coming?


In July of this year, the Department of Labor issued a notice of proposed rulemaking with major changes to the overtime exemptions currently in place. As it stands since 2004, employees may be exempt if their salary is at least $23,660 per year while performing executive, administrative, professional, outside sides, or computer duties. Exempt employees are not entitled to overtime pay while nonexempt employees are.


Under the proposed rule, the exemption regulations relating to salary and job classifications are both under review. The current estimate is the starting salary point for overtime exemptions will be approximately $48,000 – so employees earning less than that may soon qualify for overtime, depending on their job classification. The Department of Labor estimates 4.6 million workers will be newly qualified for overtime, which is expected to directly affect employers beginning in 2016.


How is trucking impacted?


An overtime exemption for motor carriers is provided within the Fair Labor Standards Act. The exemption applies to any driver, their helper, loader, or mechanic employed by a motor carrier and whose duties affect the safety and operation of motor vehicles in the transportation on public highways of passengers or property in interstate or foreign commerce. An important note: this exemption does not address intrastate commerce; the assumption would be that drivers operating in intrastate commerce may be subject to overtime pay. In addition, the exemption does not apply to employee’s work affecting the operation of vehicles weighing 10,000lbs or less.


One common misconception regarding the overtime exemption relates to who is defined as an employee engaged in “activities affecting safety.” As it stands today, this does not include dispatchers, office personnel, those who unload vehicles and those who load vehicles but are not responsible for the proper loading of it. This leaves employees with these job classifications subject to the new overtime rules if their salary is under the threshold.


Action Items for Employers


With these changes looking to take place for 2016, employers should carefully review and update their overtime policies as well as review employee job classifications as early as possible to be compliant with the rule. For more information, you can visit the Department of Labor’s Wage and Hour Division website at www.wagehour.dol.gov

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