Today, the U.S. Department of Labor (“DOL”) announced the final rule that will increase the salary threshold for so-called white collar workers and “highly compensated employees.” DOL originally announced the proposed increase last summer and since that time the details and effective date of the regulatory change have been much anticipated. This SHLC Blog Post from July 2, 2015 discussed the original proposal: https://suttonhague.com/new-proposed-increases-to-minimum-salary-paid-to-exempt-employees/.
Key Points of the Final Rule
- Effective date: December 1, 2016.
- White Collar Exemption (for Executive, Administrative, and Professional workers):
- Increases salary requirement to $913 per week or $47,476 annually; and
- Non-discretionary bonuses and incentive payments (including commissions) may be used to satisfy up to 10% of the salary requirement.
- Highly Compensated Employees:
- Increases salary requirement to $134,004 annually (up from $100,000).
- Automatic updates to the salary levels every three (3) years.
- No changes to the “duties test.”
See https://www.dol.gov/whd/overtime/final2016/ for more information.
Advice to Employers
Employers should review the compensation paid to employees currently classified as exempt from overtime for compliance with the new regulations. Employees who do not meet the new salary threshold should 1) have their compensation increased to satisfy the exemption requirement, or 2) be reclassified as non-exempt and paid overtime (on either a salary or hourly basis).
SHLC will host a special webinar on the final exemption regulations on June 2, 2016 from 10:00 a.m. to 11:30 a.m. (Pacific Time). The webinar – “New DOL Exemption Rules: What Employers Need to Know Now Beyond the Headlines” – will include a live Q&A and cover strategies for complying with these regulatory changes. To register for this special webinar, click here: https://suttonhague.com/events/?event_id1=94. For more information on this and other upcoming events, please visit the SHLC Events page on our website: https://suttonhague.com/events/.