DOL Issues Proposed New Salary Thresholds for Exempt Employees

Tip of the Month - Employment and Labor Law

As expected, on March 7, 2019, the U.S. Department of Labor issued a Notice of Proposed Rulemaking which, if adopted, would raise the minimum salary thresholds for the FLSA’s “white collar” and “highly-compensated” exemptions. Specifically, the present $455 weekly minimum salary level for exempt executive, administrative and professional employees would increase to $679 per week, i.e., $35,308 annually. Pursuant to this proposal, 10% of the foregoing $679 could be comprised of certain non-discretionary bonuses and incentive payments. Regarding the highly-compensated exemption, under the Proposed Rule, the existing $100,000 salary threshold would rise by almost 50%, to $147,414. Notably, while the Proposed Rule features increases to existing salary thresholds, it does not propose changes to the long-standing “duties test” for determining the exempt status of would-be executive, professional and administrative employees. If passed into law, these changes could become effective by January 1, 2020. Given these developments, employers should promptly begin considering whether changes in employee classifications or other modifications may be necessary in order to comply with applicable and forthcoming law.

Note: As the DOL's new Proposed Rule is also addressed in detail in our Employment Law Newsletter, please click here if you would like further information.

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