The United States Department of Labor (“DOL”) has published a new rule it proposes to increase the minimum salary threshold for exempt employees from $23,660 annually ($455 per week) to $35,308 annually ($679 per week) in order for an employee to qualify for the Fair Labor Standards Act’s (“FLSA”) “executive, administrative, or professional” exemption from the federal overtime laws, or the “white collar exemption.”
Employers faced a similar potential change in 2016, when the DOL issue a proposed rule that would have increased the salary threshold to $47,000 annually. Immediately before the rule was to take effect, a federal judge blocked it, granting a nationwide injunction, and it has never taken effect.
The new overtime rule just proposed appears to be a split between the current rule and the 2016 proposal. A 60-day comment period is currently in effect which allows for the public to submit comments for DOL review. The DOL will then publish its final rule, which it expects to finalize in 2020.
For now, employers should review their workforce to determine what changes, if any, may be necessary if the rule becomes final. This may include identification of those employees currently characterized as exempt whose salary is below the $35,308 threshold and consideration of their options in order to maintain the employees’ exempt status or to convert them to non-exempt employees.
Employers are encouraged to consult with legal counsel to discuss options. Please do not hesitate to contact Kris Cato at 803-349-4397 or firstname.lastname@example.org with any questions or concerns.