On May 18, 2016, the U.S. Department of Labor published final regulations under the Fair Labor Standards Act (“FLSA”) that more than double the minimum salary level necessary to be exempt from the Act’s overtime rules. While the changes affect all businesses subject to the FLSA, broadcasters in particular may feel the impact of the changes given the staffing models used by many TV and radio stations. The new requirements will go into effect on December 1, 2016, and broadcasters need to take steps to adapt to, and minimize the impact of, those changes prior to that deadline.
The Fair Labor Standards Act (“FLSA”) is the federal law governing wage and hour requirements for employees. Pursuant to the FLSA, employers must pay employees a minimum wage and compensate them for overtime at 1.5 times their regular rate of pay for any time worked exceeding 40 hours in a workweek unless those employees are exempt from the requirement. On May 18, 2016, the Department of Labor issued a Final Rule that effectively doubled the minimum salary threshold for certain types of employees to be exempt from the FLSA’s overtime rules, and significantly raised the salary threshold for other types of employees. As a result, many currently exempt employees whose salaries are below the new thresholds will soon be eligible for overtime pay. The White House projects the change will impact over four million previously exempt American employees.
Although the FLSA applies to almost all employers, it contains exemptions for certain types of employees at small-market broadcast stations. The Final Rule does not affect these specific broadcast industry exemptions, but will affect many other currently exempt employees in the broadcast industry who, unless they receive salary raises, will soon become eligible for overtime pay.
This Advisory only addresses federal law. Some state laws impose stricter standards than federal law as to which employees are exempt from overtime pay. Employers must ensure that they also meet the requirements of any applicable state or local employment laws.
The FLSA requires employers to pay non-exempt employees an overtime rate of 1.5 times their regular rate for all hours worked over 40 hours per workweek. However, the FLSA exempts from its overtime rules certain classes of employees who are paid on a salary basis and meet specific “white collar” duties tests. The Department of Labor’s Final Rule increases the minimum salary necessary for these classes of employees to be deemed exempt from the FLSA’s overtime rules, but does not alter the duties tests for those exemptions. (Continued…)
A PDF version of this entire article can be found at A Broadcaster’s Guide to the U.S. Department of Labor’s New Overtime Exemption Requirements.