FAQ: Restoring Overtime Pay for Working Americans Act

What is the Restoring Overtime Pay for Working American Act?

According to the text of the bill (as of 6/18/14), the Restoring Overtime Pay for Working Americans Act is intended “to amend the Fair Labor Standards Act of 1938 (FLSA) to establish salary thresholds for and limitations on executive, administrative, and professional employees and address highly compensated employees, for purposes of the requirements for exemption from the Federal minimum wage and maximum hour provisions, and for other purposes.”

What would be the impact of this Act?

The Act would make it more difficult for employers to classify employees as exempt and impose penalties on employers for failing to comply with the FLSA’s record-keeping provisions.

It would help restore overtime protections (and 40-hour workweeks) for low- and mid-wage salaried workers. Today, only 12 percent of salaried workers are guaranteed overtime pay based on their salaries, compared to 65 percent in 1975. This bill would restore overtime protections by guaranteeing coverage to approximately 47 percent of salaried workers, would ensure that people who work more get paid more, and boost incomes for those who work longer hours.

What does the Act specifically propose?

Increased Salary Basis.

• For executive, administrative, and professional exempt employees, the weekly salary would increase from $455 to $1,090 over a 3-year period.

• For highly compensated exempt employees, the annual compensation would increase from $100,000 to $125,000 over a 3-year period.

Executive, administrative and professional exempt employees cannot spend more than 50% of work hours on duties that are not exempt.

Penalties for failure to maintain records. In addition to the current civil penalty (not to exceed $1,100) which employers are subject to if they repeatedly or willfully fail to pay minimum or overtime wages, the Act would subject an employer to such penalties if it repeatedly or willfully fails to “make, keep, and preserve” records relating to wages.

How does this play into political initiatives?

This action by the Senate Democrats provides a second front to the war on exemptions declared by President Obama in March, when the White House directed the U.S. Department of Labor (“DOL”) to “modernize and streamline the existing overtime regulations” as they pertain to the application of exemptions.

What is the status of this bill?

This bill was assigned to a congressional committee on June 18, 2014, which will consider it before possibly sending it on to the House or Senate as a whole.