On March 7, 2019, the Department of Labor (“DOL”) released a proposal to increase the minimum salary threshold for the administrative, executive, and professional overtime exemptions. The proposal increases the salary basis from the current $455 per week to $679 per week. Additionally, the proposal seeks to increase the highly compensated employee exemption from an annual salary of $100,000 to $147,414, but would allow employers to use non-discretionary bonuses and other types of incentive compensation to satisfy up to ten percent of the salary. While the DOL proposal includes increases to the salary basis for the exemptions, it does not propose any changes to the duties tests.
The salary level has not been updated since 2004. In 2016, the DOL attempted to increase the salary basis for the administrative, executive, and professional exemptions to $913 per week and increase the highly compensated employee exemption to $134,004. However, before the final rule implementing the increases became effective on December 1, 2016, litigation ensued resulting in the rule being enjoined and invalidated.
The DOL now seeks to rescind the prior rule and will be accepting public comments on the new proposal. After the public comment period, the DOL will likely issue a final rule. However, the new final rule will likely also face similar legal challenges.
Employers must be cognizant of the proposed changes to the federal wage and hour laws, and be prepared to implement such changes should they take effect. Additionally, employers must ensure that they are in compliance with state and local wage and hour laws.
Parker McCay’s Employment and Labor attorneys have experience advising clients on compliance with federal, state, and local wage and hour laws. If you have any questions regarding the wage and hour laws applicable to your business, please contact us.
The content of this post is for informational purposes only and should not be construed as legal advice or legal opinion. You should consult a lawyer concerning your specific situation and any specific legal question you may have.