What lawyers need to know about the new overtime rule.

On December 1, the Department of Labor's new overtime rule will go into effect. The change to the Fair Labor Standards Act will expand overtime protections to an estimated 4.2 million workers, of which over 330,000 are in Florida. The FLSA changes extend the overtime rule to cover those making less than $47,476 per year and removes some long-standing exemptions.

The specific exemptions that are affected are known as the "white collar" exemptions. They cover executive, administrative, professional, and computer-professional employees. Each category of exemption requires an employee to have certain duties (the duties test). In addition to having the required duties, the employee must also (with limited exceptions) be paid on a salary basis, with the salary meeting or exceeding a specified minimum amount (the salary test).

The new rule raises the minimum salary required to pass the salary test to at least $913 per week, or $47,476 annually. This is a major increase from the previous minimum annual salary level of $23,660 for exempt employees. The highly compensated employee exemption now requires a total annual compensation of at least $134,004. That exemption was previously set at $100,000.

The new rule does not directly impact the compensation of attorneys because lawyers fall under an exclusion in the professional exemption that does not require them to meet the salary basis test. However, others who work in law offices may be affected. For example, if a firm deems its office manager or network administrator exempt under the administrative exemption, it must ensure that the employee's salary meets the new test.

As for other common law firm staff positions, the new rule may not have much impact, as neither legal assistants nor paralegals typically qualify for exemption under the administrative exemption. The duties test for that exemption requires the employee to exercise significant discretion and independent judgment, both of which are typically inconsistent with the ethical limitations on a paralegal or legal assistant's ability to operate independently of a supervising attorney.

For others, however, the new rule will likely be a game-changer. Many firms have treated their managers as exempt under the executive exemption because they supervise two or more employees. These managers often work in excess of 40 hours per week to accomplish their duties. If those managers are currently paid less than $47,476 annually, these firms must now...