Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 3222 JUNE 2016 • FOGHORN LEGAL E ffective December 1, 2016, the US Department of Labor regulations defining overtime-exemption eligibility requirements will change, with the impact upon vessel owners and operators being that fewer employees may be eligible for payment on a level salary basis for all hours worked, That is, they may lose their overtime exemption. The new require- ments will have a direct impact upon current salaried employees being paid a salary of less than $913 per week. As background, the Federal Fair Labor Standards Act, the federal law controlling wages, hours and overtime, requires that all employees who work more than forty hours in a single work week be paid time-and-one-half for all hours worked over forty hours. The requirement is universally appli- cable to every employee, unless the employee qualifies for one of the many overtime exemptions, which allows the employer to pay the employee on a level salary basis each week, regard- less of the number of hours worked in the week. The new regulations issued on May 18, 2016, address eligibility re- quirements to qualify for three of the most commonly used exemptions, often called the “white collar exemp- tions:”(1) the Executive Exemption, (2) the Administrative Exemption, and (3) the Professional Exemption.1 These three are the exemptions most frequently used by maritime employers to pay managers, super- visors and department heads on a level salary basis. The first two of these three exemptions, very broadly speaking, require that the individu- al exercise judgment and discretion as their primary function relating to either the management and supervi- sion of other employees (the “Executive Exemption”) or with the direction of a particular function within the em- ployer’s business or of the manage- ment of a function in another business (the “Administrative Exemption”). As applied to the passenger vessel industry, the Executive Exemptions might apply to the sales department supervisor or the operations manager. The Administrative Exemption might apply to jobs where other employees are not supervised, but the function is vital to business direction, such as the safety director or the company bookkeeper. Additional exemptions, which remain unchanged by the new rule, apply to “Seamen” and seasonal workers at an “amusement or recre- ational establishment.”1 The change announced on May 18, 2016, increases the salary level that must be guaranteed, in each week (not subject to fluctuation each week based upon hours worked), to qualify for a white collar exemption, currently set at $455/week ($23,660/year). Effective December 1, 2016, the white collar exemptions will only be available to employees if there is a guaranteed salary of $913/week ($47,476/year) or By Steven E. Bers, Esq., PV A General Counsel New Department of Labor Overtime Regulations