The $11.4 million exemption for 2019 will remain in place and may increase slightly from year to year since it may be adjusted for inflation. The TCJA is slated to expire in 2025, so it may be that the exemption goes back. Continue reading
Almost three years ago, the Department of Labor announced new overtime rules, including a drastic increase in the salary requirements for “white collar” exemptions from overtime pay. That new amount, over $47,000, was subject to immediate appeals, and never went into effect.
On March 7, 2019, the Department of Labor announced a new, revised rule increasing the salary threshold to $35,308. This is still subject to public comment and possible revisions, but even if this number changes it will likely stay in the low to mid-$30’s. It is anticipated this increase would impact only about 25% of those who would have been impacted by the 2016 increase.
There will be a 60 day comment period once this is officially published by the DOL. The end effective date will depend upon whether there are revisions, further comment periods, etc.
If you currently have exempt employees who make less than $35,308/year, you will need to either raise their salary to this level to keep their exemption, or have them changed to non-exempt status, at which point they will be eligible for overtime pay for all hours worked over 40 in a week.
This is a good time to review the current salaries of your exempt employees to determine if you will need to make any changes based on the proposed increase. This is also a good time to make sure that you have properly classified employees as exempt or non-exempt.
The proposed rule can be found here. (Warning, the proposed rule is 219 pages long!)
Please see our August 2016 post for other suggestions on how to prepare for this change. If you have any questions regarding FLSA exemption or the new regulations, please contact Jennifer Corso. email@example.com, 216-381-3400.