As foreshadowed in our July 2015 Advisor, the Department of Labor has issued the long awaited revisions to the Fair Labor Standards Act’s “white collar” overtime exemption. (29 CFR 541). The DOL largely adopted the proposed rule, though with some important changes. When the rule takes effect on Thursday December 1, 2016, the minimum salary requirement for executive, administrative, and professional employees will rise to $913 per week or $47,476 annually. The salary level for employees who qualify for the “highly compensated employee” exemption will rise from $100,000 to $134,004 annually. The DOL left some room for employer creativity by allowing up to ten percent of the salary amount to come from non-discretionary bonuses and incentive payments, including commissions, provided the amounts are paid at least quarterly. These minimum salary requirements will automatically increase every three years beginning on January 1, 2020. The DOL opted not to make any changes to the duties test associated with the white collar exemption.
Now is the time to evaluate whether you have any employees who will no longer be exempt under the new rules. Please contact any attorney in the BFAS Employment Law Practice Group if you have questions or are interested in taking advantage of our employment law audit program to ensure your business is in compliance with the myriad workplace regulations and using current best practices.
Shannon DeNatale Boyd, Employment Attorney
805.966.7759
