ARE YOU READY FOR THE NEW FLSA OVERTIME EXEMPTION SALARY MINIMUMS?

On May 23, 2016 the Department of Labor published its Final Rule on FLSA exemptions for executive, administrative, professional, outside sales and computer employees updating the regulations covering these white collar exemptions to overtime. The most significant change to the rules is the minimum salary that must be met for an employer to take advantage of the exemptions created by the overtime laws. Currently, to qualify for the white collar FLSA exemptions, employees are required to meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. The Final Rule increases the required salary to qualify for the exemption from $455 weekly, or $23,660 annually, to $913 weekly, $1,826 biweekly, $3,956 monthly or $47,476 annually. The new salary threshold will equal the 40th percentile of weekly earnings of full-time workers in the lowest wage census region. The Final Rule will be effective December 1, 2016.

This summary is by no means a thorough or complete description of the effect of the new rules. Employers will be able to comply with the new rules in a variety of ways, but covered employers should be considering the rule changes so that they are ready to implement any required changes before December 1, 2016. You may find the assistance of a business attorney knowledgeable about the Fair Labor Standards Act helpful to you in meeting the new requirements of the law. As always an ounce of prevention is worth a pound of cure, especially when the cure is litigation.