DOL Proposes Salary Increase for FLSA’s White-Collar Overtime Exemptions
It’s not déjà vu. The Department of Labor is trying to change the white-collar overtime exemptions …again. On March 22, 2019, the DOL published a proposed rule that would increase the minimum salary requirements for the Fair Labor Standards Act’s executive, administrative and professional overtime exemptions.
The DOL estimates that 1.3 million currently exempt employees would become nonexempt under the proposed rule. Without some form of intervention, employers will have to start paying overtime to these newly-nonexempt employees.
The proposed rule does not change the standard duties tests for exempt white-collar employees. Instead, the DOL focused primarily on updating the minimum salary and compensation levels needed to qualify for the executive, administrative and professional overtime exemptions.
Proposed Salary Level [Current Salary Level]
According to the DOL, salary levels needed to be updated to reflect growth in wages and salaries. The proposed salary levels, however, are lower than the salary levels required under the 2016 final rule, which was blocked by a federal court. The minimum salary needed to qualify for white-collar exemptions under the 2016 final rule was $913 per week ($47,476 per year).
The period for public comment on the proposed rule opened March 22nd and closes May 21, 2019. The DOL anticipates that the proposed rule, once finalized, will become effective in 2020. This gives employers some time to prepare, but not a lot.
Earn HRCI and SHRM recertification credits while learning about wage and hour regulations. The Human Equation offers additional training designed to reduce the likelihood of employment-related liabilities and insurance options for protecting against employment practices liability claims.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.
The DOL estimates that 1.3 million currently exempt employees would become nonexempt under the proposed rule. Without some form of intervention, employers will have to start paying overtime to these newly-nonexempt employees.
The proposed rule does not change the standard duties tests for exempt white-collar employees. Instead, the DOL focused primarily on updating the minimum salary and compensation levels needed to qualify for the executive, administrative and professional overtime exemptions.
Proposed Salary Level [Current Salary Level]
- Weekly: $679 [$455]
- Bi-weekly: $1,358 [$910]
- Semi-Monthly: $1,471 [$985.83]
- Monthly: $2,942 [$1,971.66]
- Annually: $35,308 [$23,660]
According to the DOL, salary levels needed to be updated to reflect growth in wages and salaries. The proposed salary levels, however, are lower than the salary levels required under the 2016 final rule, which was blocked by a federal court. The minimum salary needed to qualify for white-collar exemptions under the 2016 final rule was $913 per week ($47,476 per year).
The period for public comment on the proposed rule opened March 22nd and closes May 21, 2019. The DOL anticipates that the proposed rule, once finalized, will become effective in 2020. This gives employers some time to prepare, but not a lot.
Earn HRCI and SHRM recertification credits while learning about wage and hour regulations. The Human Equation offers additional training designed to reduce the likelihood of employment-related liabilities and insurance options for protecting against employment practices liability claims.
The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.