This past Wednesday, the U.S. Department of Labor released its long-awaited update of the regulations governing overtime pay under the Fair Labor Standards Act (FLSA). Specifically, the new Labor Department rule modifies the FLSA’s so-called “white collar” exception, under which certain salaried workers employed in an executive, administrative, or professional capacity are not entitled to overtime compensation.
Currently, anyone working in a white-collar position who receives a salary of at least $23,660 per year is exempt from the FLSA’s overtime requirement, meaning that they do not receive any additional pay even when working more than 40 hours per week. Beginning in December 2016, however, that salary threshold will rise to $47,476, so that any white-collar workers earning less than that amount annually will now be owed one-and-a-half times their normal hourly rate anytime they work 41 or more hours per week.
Because MLB teams employ dozens of front-office and business employees working in an executive, administrative, or professional capacity, and because many of these individuals may earn less than $47,000 per year despite routinely being expected to work more than 40 hours per week, this new rule has potentially significant ramifications for the baseball industry.
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