Employers with exempt (salaried) employees – do not forget that the Fair Labor Standards Act’s (FLSA) salary threshold increases January 1, 2020 to $684 per week ($35,568). This means, that if you have a salaried exempt employee making LESS than $684 per week, effective January 1, 2020, they will need to be reclassified as non-exempt
Exempt
DOL Announces Proposed New Overtime Rules – $35,308 Will Be the New $23,660
The day we’ve all been waiting for has arrived! Perhaps not quite that exciting, but the U.S. Department of Labor has finally issued its Notice of Proposed Rulemaking, its second attempt at updating the Fair Labor Standard’s Act’s (FLSA) so-called “white collar” exemptions for executive, administrative, professional, outside sales, and computer employees. As I’m sure…
DOL Issues Opinion Letter Clarifying “Volunteering” Versus Compensable “Work”
I’m a big fan of volunteering, and am highly involved in several community groups. In one of them that I’m involved in, we frequently joke about being “voluntold” to do something (go ahead and suggest a good idea…dare you!). Yet, when is volunteering truly volunteering and not compensable work? In another of the U.S. Department…
DOL: Employers Do Not Need to Pay Employees for Voluntary Wellness Activities, Biometric Screenings & Benefit Fairs
On August 28, 2018, in FLSA2018-20, the US Department of Labor (DOL) issued another opinion letter stating that the Fair Labor Standards Act (FLSA) does not require that employers pay employees to attend voluntary wellness activities, biometric screenings, and benefits fairs held during (or outside of) work hours – if some conditions are met.…
FLSA Overtime Overhaul Is Deemed Invalid
I suspect you have all heard by now, but on September 5, 2017, Judge Mazzant of the Eastern District of Texas declared the proposed overtime overhaul regulations to be invalid. As a result, the minimum salary levels remain as before the revisions -$23,600 annually, or $455 per week. For highly compensated employees, the amount will…
Department of Labor Publishing Overtime Overhaul Request for Information on July 26, 2017
The United States Department of Labor announced today that, as indicated in the 5th Circuit Appeal recently, it will be publishing a new Request for Information (RFI) concerning the overtime regulations (technically, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees”) tomorrow. The July 26, 2017 RFI will seek public…
Employers Have Just 3 Months to Get Your FLSA House In Order!
As the Minnesota State Fair is here with everything “on a stick”, and the Renaissance Festival is back to jousting…it is signaling the end of summer, and beginning of a new school year – or in our case – a new FLSA year. The December 1, 2016 deadline is just three months away; similar to…
Salary PLUS Overtime? How to Pay a Non-Exempt Employee a Salary (It Can Be Done!)
Following the big news about the overtime regulations overhaul, I’ve been fielding several calls from concerned HR professionals regarding the actual conversion of certain employees (paid less than $47,476) from exempt to non-exempt by December 1, 2016. As I predicted, many employees are already voicing concerns about not being paid a salary (and thus, not…
Overtime Exemption Rule Announced: $47,476 Is the New $23,600, Effective December 1, 2016
The wait is finally over! Tonight the Department of Labor (DOL) announced that it is releasing the final rule tomorrow, May 17, 2016, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees” which will mandate the new minimum salary level to be $913/wk or $47,476 per year. The DOL’s Fact Sheet was released tonight, along with a wealth of information that is available such as Q&A, Comparison Table of the proposed rule and final rule, a Small Entity Compliance Guide, a Guidance for Private Employers, and many others. Commonly referred to as the “white collar exemption”, the Fair Labor Standards Act (FLSA) provides that all employees subject to the FLSA are entitled to overtime, unless they are otherwise exempt. The actual rule was not released (go figure), so I’ll certainly post an update tomorrow (probably when you are reading this anyway as I’m having my wage and hour geek-out tonight). Although, according to one of the fact sheets, the Final Rule should be posted here: dol.gov/whd/overtime/final2016.
In order to exclude an employee from minimum wage and overtime requirements, three thresholds must be met: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work (the “salary basis test”); (2) the employee’s salary must be a minimum amount (the “salary level test”); and (3) the employee’s job duties must primarily involve executive, administrative or professional duties as defined by the FLSA (the “duties test”). Neither the salary level test nor the salary basis test applies to outside sales (I stress outside). The Rule does not change the duties test.
Increased Salary Level & 3 Year Automatic Updates
As I wrote about in my earlier post when the rule was in the approval phase, the current threshold for executive, administrative or professional employees is that the employee must be paid a salary of at least $455/week ($23,660/year). The significant change is that this base threshold is now increased to $913/week ($47,476/year) effective December 1, 2016. For Computer-related employees, they may be paid the $913/wk or at least $27.63/hr. The threshold for “highly compensated employees” (these folks do not need to meet the duties test because it is presumed they will meet it since they are highly paid) is increased from $100,000/year to $134,004/year effective December 1, 2016. Notably, unlike before (the previous thresholds were set in 2004), the new rule provides that the salary and compensation thresholds will be automatically updated every three (3) years, the amounts of which will be posted in the Federal Register at least 150 days prior to their effective date.
Also, keep in mind that there are, as always, quirks and nuances to the new rule and this blog is just a general overview of what’s to come. For example, employees may be paid on a “fee basis” rather than a “salary basis”. In this way, the employee is paid an agreed sum for a single job, no matter how long it takes. However, to determine if the fee payment meets the threshold, you consider the time worked on the job and determine if that payment is at a rate that would equal at least $913/week if the employee worked 40 hours. Thus, a computer programmer is paid $800 to fix an app and takes 10 hours to do so, this meets the test as $800/10=$80/hr x 40 = $3,200 (much more than $913).
Don’t Forget About the Duties Test – the Employee Must Be “White Collar”
Regardless of an employee’s salary, an employee may make more than the threshold amount and still not qualify for the exemption. …
Continue Reading Overtime Exemption Rule Announced: $47,476 Is the New $23,600, Effective December 1, 2016
$47,892 -The Single Most Significant Number to Employers This Spring. FLSA Overtime Regulations Overhaul Expected to Be Approved By June.
On March 14, 2016, the Department of Labor submitted its “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees” final proposed rule to the Office of Information and Regulatory Affairs. Commonly referred to as the “white collar exemption”, the Fair Labor Standards Act (FLSA) provides that all employees (subject to…