DOL’s New Overtime Rules

Today’s burning question: I heard a rumor that there are some new overtime rules coming out soon. Will these new rules have an impact on fire departments?

Answer: That is a great question, and one I get asked a lot these days. The US Department of Labor is indeed overhauling the regulations that pertain to certain exempt employees, and in particular executive, administrative and professional employees. The changes will likely have minimal impact on most fire departments. However, the impact could be substantial in those departments that are affected.

To fully answer the question, let me turn it over to my colleague and co-instructor, Bill Maccarone, with whom I teach the class: FLSA For Fire Departments:

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The US Department of Labor under the Obama administration’s direction is set to overhaul the minimum salary requirement for overtime exempt salary workers (often referred to as the executive exemption), throughout the country later this year. Some estimate as many as 4.2 million Americans that are currently ineligible for overtime under the FLSA will be become eligible under the new regulations. Will these changes effect fire departments or firefighters? It depends……

In some circumstances, this overhaul may impact fire departments, however this should not have a drastic impact on fire department budgets or operations…. This is why.

The changes apply to exempt salaried workers considered to be bona fide executive, professional, and administrative employees. Most line firefighters are hourly employees and will not be affected. The DOL already has rules that exclude fire department personnel considered to be first responders from these types of exemptions.

While the vast majority of courts have followed the DOL’s first responder regulations, some courts (11^th Circuit), have failed to do so and allow first responder officers to qualify as exempt executives. Fire departments in the 11^th Circuit are the ones most likely to be impacted by the new regulations. Also, some fire chiefs and administrative officers who are currently considered to be executives may be impacted by the new rules.

Currently, to qualify for the executive exemption an officer must be paid a minimum salary of $455 per week ($23,660 annually) and have certain high level primary duties related to the operation of the fire department. If the officer meets these requirements they can be considered an executive and be ineligible for overtime or minimum wage protection. The new regulations will increase the minimum salary threshold necessary to qualify as an executive to $913 per week ($47,476 annually).

What that means for line fire officers in 11^th Circuit states (Alabama, Florida, and Georgia), if you are currently considered to be an exempt executive employee (no overtime) and earn less that $913/week ($47,476 annually) your employer must either raise your salary to the new minimum OR pay you overtime starting in December 2016.

For fire chiefs or administrative officers across the country currently earning a salary between $455 and $912.99 per week and who are exempt from overtime under the executive exemption, they too will be receiving a pay raise in December of 2016… or will become hourly employees.

The new regulations will automatically increase the minimum salary threshold based on certain economic factors, in an effort designed to prevent the need for a dramatic increase in the future.

To wrap up, while the new regulations are not without importance for some fire departments, most fire officers are likely to be earning in excess of the new minimum salary threshold. Fire department administrators need to stay abreast of automatic increases to avoid the potential catastrophe wage and hour litigation can bring to an organization. In fact, 2015 saw another increase in FLSA related lawsuits in this country. Year after year the number continues to grow. It is possible that over 9,000 FLSA law suits will be filed in 2016 making FLSA suits the No. 1 reason your fire department could be hauled into court!!!

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Thanks Bill!!!

Incidentally, Bill and I will be presenting our FLSA classes three times this year:

Hanover Park (Chicago Metro area), IL  August 3-5, 2016

Rocky Mount, NC  November 15-17, 2016

Mesa (Phoenix Metro area), AZ  December 6-8, 2016

Please join us!!!