Yesterday, the Department of Labor (“DOL”) announced that, effective January 1, 2020, the new minimum annual salary for exempt executive, administrative, and professional employees will be increased from $23,660 ($455/week) to $35,568 ($684/week). The DOL’s new salary threshold replaces the currently enjoined Obama-era rule that would have increased the minimum salary to $47,476 as of December 1, 2017.
The new rule also increases the minimum salary for “highly compensated workers” from $100,000 to $147,414. Employees who earn at least this amount and perform some managerial functions can be treated by employers as exempt from overtime under standards far more flexible than those for lesser-paid white collar employees.
What does this mean for employers? In an effort to comply with the new enjoined 2016 rule, many employers previously increased salaries to the anticipated $47,476 threshold or converted employees to hourly wage earners. However, to the extent employers did not take such actions, they will now need to implement a plan for currently exempt employees earning less than $35,568 before the new rule becomes effective at the end of this year.
If you have questions about the DOL’s new minimum salary rule and how it could affect your employees, please contact one of our Labor and Employment Group attorneys.
Alert
09.25.2019