Final Ruling Announcement: Required Minimum Salary for Employees to be Exempt from Overtime

The federal Department of Labor has announced its final rule increasing the required minimum salary for employees to be considered exempt from overtime. The new threshold is $38,845/year, up from $23,660. At one point in time the DOL was going to require employees to be paid a minimum of more than $47,000 annually.

Absent litigation, or action by Congress, the final rule will be effective January 1, 2020.

https://www.dol.gov/whd/overtime2019/

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VW Contributor: Matthew G. Dunning
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NEW OVERTIME RULES TEMPORARILY SUSPENDED

For employers preparing to comply with the new salary exemption regulations, designated to start on December 1, 2016, the new rules have been temporarily suspended. The new regulation would have increased the minimum salary required to qualify for the executive, professional, and administrative exemptions, increasing the minimum salary from $23,660 to $47,892 annually. These exemptions are often referred to as the “white collar” exemption and if an employer failed to meet the minimum salary requirement, the employer would have to pay the employee overtime for time worked past 40 hours in a week.

The temporary injunction means the rule is suspended and will not affect employers until further hearings are held. However, due to the current political climate, it is unclear whether further hearings will occur. Thus, employers do not have to comply with the new exemption rules, but should remain prepared to implement procedures to pay overtime to employees that would not meet the new white collar exemption rules.

For employers that have already implemented policies and procedures to comply with the pending white collar exemption regulations, or those that have communicated pending changes with employees, please contact Vandenack Weaver, LLC, to discuss your options.

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