Check Your Uncompensated Overtime Calculations - Historical Averages May Not Apply to Future Contracts

Here's something that will likely affect Government contractors though the significance and impact may not be known for awhile. Yesterday, the President ordered the Secretary of Labor to revise federal rules on overtime pay for some executive, administrative, and professional (a.k.a. "white collar")salaried employees.

The Fair Labor Standards Act provides basic rights and wage protections including minimum wage and overtime requirements. These regulations also carve out exemptions from the overtime requirements for so-called white collar positions. Those exceptions, according to the President, are outdated resulting in millions of Americans lacking the protections of overtime and in some cases, minimum wages. The specifics of the President's intent are as yet unknown.

Therefore, I hereby direct you to propose revisions to modernize and streamline the existing overtime regulations. In doing so, you shall consider how the regulations could be revised to update existing protections consistent with the intent of the Act; address the changing nature of the workplace; and simplify the regulations to make them easier for both workers and businesses to understand and apply.

The current exemption, which is supposed to cover highly paid, white-collar employees not covers workers earning as little as $24 thousand per year ($455 per week). Some reports on this proposed action speculate that the President is looking to increase this threshold by double.

Government contractors should consider the impact of this when negotiating new contracts. It will most certainly impact the calculations of "uncompensated overtime" that the Government is so keen about.