For years we have been hearing about the DOL’s increase in the salary threshold for certain exempt employees. Well, it’s here and goes into effect January 1, 2020. If you have exempt employees earning less the $684 per week, their weekly salary may need to be increased.
Which exempt employees are impacted?
The new salary requirement applies to employees who are classified as exempt from overtime and minimum wage requirements by the Executive Exemption, Administrative Exemption, Professional Exemption (and impacts the Highly Compensated Employee Exemption) under the federal Fair Labor Standards Act (FLSA).
What Exactly Has Changed?
There are many things the DOL looks at to determine if an employee can be classified as exempt. For many exemptions, the very first thing is if the employee is being paid on a salaried basis at the minimum salary requirement. Currently, this minimum requirement for the Executive, Administrative, and Professional Exemptions under the FLSA is $455 per week ($23,660 per year). Beginning January 1, 2020, however, this is increasing to $684 per week ($35,568 per year). Please remember that the salary threshold is not the only criteria which must be met to truly determine if an employee can be classified as exempt – for most exemptions, there is also a “duties” requirement.
Please let us know if you have any questions or if you would like to explore your options, such as converting the employee to a salaried, non-exempt classification.
Need a Screenshot of your Current HR risks?
One great way to find out where you might be exposed to risks and fines is our Strategy in a Nutshell Consultation. We identify areas that leave a small business open to employee-related claims and provide you with an actionable report with suggested strategies to correct any issues. For more information on this consultation, read more HERE.