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DOL to Expand Overtime Pay

March 14, 2014 Written by: Kevin Frankovich, CGR Associates, Inc.

President Obama will issue a memorandum directing the US Department of Labor (DOL) to strengthen rules on overtime. This could lead to extra pay for millions of workers who aren’t currently paid for their extra hours of work. Importantly, this change will also impact Service Contract Act-covered contracts since the FLSA overtime rules also apply to SCA contracts.

Currently federal rules stipulate that hourly workers are paid time-and-a-half if they work more than 40 hours in a week. Salaried workers, on the other hand, only receive overtime if their regular salaries are less than $455 a week — a threshold established in 2004.

The memorandum may direct the DOL to revise the rules to expand the number of employees eligible for overtime pay by increasing the salary threshold for overtime eligibility and by changing the definition of manager.

While a regulatory change does not require Congressional action, it could take well over a year to implement. The DOL will have to publish a proposed rule and seek public comments.  At the present time the Administrator position of the Wage and Hour Division is awaiting Senate confirmation.