The Department of Labor has proposed an increase in the salary-level threshold for white-collar exemptions to $35,308 per year from $23,660.
If finalized, the new overtime rule would result in the reclassification by employers of more than a million currently exempt workers as nonexempt and an increase in pay for others above the new threshold. The proposal does not call for automatic adjustments to the salary threshold, does not create different salary levels based on region of the country and does not make any changes to the duties tests.
"Although consistent with expectations, employers will be relieved that the Department of Labor did not propose changes to the duties tests," said Ryan Mick, an attorney with Dorsey & Whitney in Minneapolis. Changes to the duties tests "would have required many employers to undertake a far more complex analysis to determine exempt status for many employees."
Unless exempt, employees covered by the Fair Labor Standards Act must receive at least time and one-half their regular pay rate for all hours worked over 40 in a workweek.
Meeting the salary threshold doesn't automatically make an employee exempt from overtime pay; the employee's job duties also must primarily involve executive, administrative or professional duties as defined by the regulations.
For more on this article provided by the Society for Human Resource Management, go to https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/New-FLSA-Overtime-Rule-Proposal-Expands-Worker-Coverage.aspx.