– Photo by John Meiu
On Wednesday, August 12, Butzel Long hosted a breakfast briefing at its Bloomfield Hills office on “The Department of Labor’s Plans to Expand Overtime Pay Eligibility and to Attack Misclassification of Employees as Independent Contractors.” Speaking at the program were Butzel Long Shareholders (left to right) Rebecca Davies and Gary Klotz. “We are talking about the Department Labor proposed regulations concerning overtime pay and independent contractors,” Klotz noted.
The United States Department of Labor has proposed a major revision of the regulations for the “white collar” exemptions – executive, administrative, and professional employees – from the Fair Labor Standards Act’s overtime premium pay requirement. This proposed regulation, which will become effective sometime in 2016, will dramatically reduce the number of employees exempt from overtime payments, and extend the entitlement to overtime premium pay to an estimated 4.6 million workers who are now classified as “exempt.”
The proposed regulation will potentially affect all employers that have employees who are “exempt” under the “white collar” exemptions. ?Additionally, On July 15, 2015 the DOL issued guidance that narrowed the definition of “independent contractor” so that many previously classified as independent contractors man now need to be properly classified as employees. This narrowing of the definition of “independent contractor” is due partly to the DOL deemphasizing the degree to which the business controls an individual’s work, and focusing instead on the economic realities test, which looks at whether the worker is economically dependent on the employer or in business.
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