Under the Fair Labor Standards Act (FLSA) employers are required to pay overtime wages to employees who work more than 40 hours in a workweek. Exceptions apply to certain workers such as “white collar” executives, administrative or professional employees, and highly compensated employees. On March 7, 2019 the Department of Labor (DOL) issued a proposed rule modifying the salary thresholds applicable to “white collar” exemptions. These thresholds were set to increase in 2016, but were deemed to be excessive at that time. Thus, the rule was not enforced and the original 2004 levels remained in place. Under the new proposed rule, the minimum salary level for executive, administrative, and professional employees would increase from $455 to $679 per week ($35,308 per year). The minimum salary level for highly compensated employees would also increase from $100,000 to $147,414 per year.
It is important to note that this is a proposed rule and the changes will not take effect until a final rule is issued. However, employers should become familiar with the proposal and begin to identify potential effected employees. The attached “Compliance Bulletin” provides an in depth overview of the new proposal, along with links to the proposed rule, a fact sheet, and frequently asked questions. Cowden’s compensation consulting practice can help.
Contact your Cowden representative for more information on this or other compliance issues.