The new overtime regulations issued by the U.S. Department of Labor, which take effect December 1, will impact many law-firm employers to the extent they have traditionally been paying, or not paying, employees with certain job responsibilities for hours worked in excess of 40 per week.
In general, executive, administrative, and professional ("EAP") employees are exempt from the Fair Labor Standards Act's overtime provisions. According to the DOL's fact sheet, the Department has historically required three tests to be met before the FLSA's EAP exemption applies. See https://www.dol.gov/whd/overtime/final2016/overtime-factsheet.htm.
To qualify for the exemption, employees must (1) be paid a fixed, predetermined salary; (2) the amount paid must meet a specific minimum salary level; and (3) the employee's job duties must primarily involve executive, administrative, or professional duties.
The new rule raises the minimum salary from a weekly amount of $455 ($23,660 annually) to $913 per week ($47,476 annually), doing away with the requirement that the rate be an annual salary as opposed to a fixed hourly rate. Teachers, lawyers, and doctors are considered bona fide professionals under the rule; whether they make $913 per week is irrelevant. Law firms need to audit positions within their ranks to determine both whether the weekly amount and the duties tests are met.