Do you employ exempt (salaried) supervisors, managers, trainers, recruiters, and other professionals earning less than $50,440 per year? If so, Uncle Sam may be giving them a raise very soon, whether your margins can support the increase in pay or not.
For the last year, the US Department of Labor (DOL) has been pressing to greatly increase the minimum salary required for exemption from the FLSA's minimum wage and overtime pay requirements. It appears that time has come.
The DOL has now sent to the Office of Management and Budget (OMB) its changes to the proposed final rule. Though Republican members of the House and Senate introduced a bill last week that would invalidate the proposed rule ("The Protecting Workplace Advancement and Opportunity Act"), there is virtually no chance of the bill becoming law during 2016 due to President Obama's veto power.
In particular, the DOL intends to:
- Raise the salary threshold for "white collar exemptions" from $455 per week (the equivalent of $23,600 per year) to about $970 per week ($50,440 per year) in 2016.
- Raise the total annual compensation requirement for exempt highly compensated employees to $122,148 per year.
- Automatically update the salary and compensation levels to ensure that they rise with inflation and continue to be an effective test for exemption.
According to insiders, the final rule is likely to be published and implemented (after a 60-day implementation period) on or before November 1, 2016-just prior to Election Day.
To print the DOL's "Fact Sheet," please click here.
If you are not prepared for these changes, it's not too late, but time is running out!► Back to News & Resources