The United States Department of Labor just settled a federal lawsuit filed, ironically, against the U.S. labor department for violations of the Fair Labor Standards Act (FLSA). The lawsuit asserted that Labor Department employees had not received proper payment for all hours worked, including all overtime compensation. Allegations inlcuded that the DOL improperly classified many of its workers, including labeling many as exempt who were in fact, non-exempt. This settlement – valued at $7M – shows the difficulty in making proper classifications and that no one is immune. In fact, statistics show that nearly 80% of employers have made classification errors. When misclassifications occur, employees may lose out of valuable take home pay. Ensuring that you are properly classified – at that your employer is in compliance – is especially important with changes to the FLSA to be implemented soon.
The new regulations will raise the salary threshold set forth by the FLSA that serves as the minimum pay an employee can receive before an employer may classify the worker as exempt. This level will be increased from $455 per week to $913 per week, making potentially millions more Americans eligible for overtime pay.