Obama Executive Order on Overtime Regulations Expected

Association of Construction and Development
April 14, 2014 — 1,454 views  

The Obama administration announced on March 13 of its plans to issue an Executive Order by which the Department of Labor (DOL) will make changes to regulations that govern how the employees are eligible for overtime as per Fair Labor Standards Act (FLSA).

Although the details of Executive Order have still not been released, it is to be expected that the FLSA will raise the minimum pay that employees must get to qualify for exemption from $455 in a week to $984 in a week. In addition to minimum pay requirements, the employees must perform a few categories of work to qualify for exemption. The test for primary duties is the evaluation generally used to find out whether the category of work an employee is doing qualifies for exemption, is also expected to change. Both changes could have an impact on construction industry.

It is presumed that DOL will start the rule-making process later in 2014. This will include opportunity for the public to comment. The Executive Order will be continued to be evaluated by the AGC and will be commented on when the opportunity arises.
Overtime pay overview

The provisions relating to federal overtime are elaborated in Fair Labor Standards Act (FLSA). If not exempt, employees who are covered by FLSA must get overtime pay for the hours worked above 40 in any given workweek. The rates must be one-half of their regular pay rates. The Act has not specified any limit on the work hours the employees can work in any work week. The Act requires employees to be older than 16 years and overtime work pay for holidays, Saturdays and Sundays are not specified to be paid unless such days involve the employee to work overtime as well.

The Act is applied on the basis of a workweek. The workweek as fixed by the employer is a regular recurrence of 168 hours. It means seven successive 24 hour periods. It may not coincide with calender week and may start at any hour and any day of the week. Different workweeks can be created for employee groups or different employees.  Hour averaging over two weeks or multiple weeks is not to be permitted. In a normal professional environment, the pay due to overtime in a specific workweek should compulsorily be paid on regular pay day for pay period in which wages were earned.


Association of Construction and Development