The U.S. Department of Labor (DOL) has issued a new proposed rule designed to elevate the minimum salary requirements for the “white collar” exemptions. These exemptions comprise those in executive, administrative, and professional roles from minimum wage and overtime pay stipulations as drawn forth in the Fair Labor Standards Act (FLSA). As indicated at Jackson Lewis P.C., the proposed rule change suggests a significant increase in the salary level for the white collar exemptions to take effect. The proposed increase, which arises from the current $684 per week ($35,568 per year) will see an increment to $1,059 per week ($55,068 per year).
This development succeeds a series of efforts by the Department of Labor to reshape and refine the overtime pay rules in recent times. The change in the salary threshold is set to have a considerable impact on employees falling within these white-collar roles as well as their employers. The proposed change may prompt companies and law firms to reevaluate the status of employees currently classified as exempt under the white-collar exemption.
Organizations should remain alert to these proposed changes and monitor updates relating to this rule revision, as any final decision made by the Department of Labor may necessitate adjustments to employee salaries or changes in their exempt status to ensure compliance. The implications of non-adherence to these adjustments are potential lawsuits and hefty monetary damages. Additionally, it is imperative to note that these changes are under proposal and yet to be enacted.
As a measure to aid in preparation, it is recommended that organizations review their current pay schemes, specifically among employees classified in these exemption categories. A keen study on the financial impact the change may have and proactive planning can help in a smooth transition should the proposed rule changes take effect.