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Time To Get Ready! Changes To White Collar Overtime Exemptions Expected Very Soon

Volume 15, Issue 7
May 10, 2016

We have been writing for some time about the U.S. Department of Labor's (DOL) proposal to update the regulations governing the minimum wage and overtime exemptions for executive, administrative, and professional employees (white collar workers) under the Fair Labor Standards Act (FLSA). These are the rules that govern whether an employer can avoid paying overtime to salaried employees such as managers.

As you may remember, a key component of this proposal is to increase the minimum salary threshold necessary to qualify for the white collar exemptions from $455 a week ($23,660 per year) to about $970 a week ($50,440 per year). The DOL also proposed to raise the total annual compensation requirement needed to exempt highly compensated employees from $100,000 to $122,148 annually.

While we do not yet know the exact salary amounts the DOL has settled upon in the final regulations, we do know that the regulations will be issued very soon. Moreover, because of the delay in publishing the revisions, it is likely that employers will be given only 30 to 60 days to comply with the new regulations. As such, we recommend that you begin auditing your executive, administrative and professional employees now to determine who may need to be reclassified as non-exempt and how those changes will be put into place. If you need assistance in this area, please contact a KZA attorney.

Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.