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Labor and Employment Law Updates

DOL Proposes Increased Salary Level for White-Collar Overtime Exemptions

The United States Department of Labor (“DOL”) plans to increase the salary threshold for so-called “white collar overtime exemptions,” from $455 per week ($23,660 per year) to $679 per week ($35,308 per year), and to increase the annual compensation requirement for a separate class of “highly compensated employees” from $100,000 to $147,414 per year.FN1

The DOL’s proposed rule does not modify the standard for determining what job duties employees must perform to be considered exempt from overtime based on their bona fide executive, administrative, or professional capacity, as those terms are defined in the DOL’s regulations.FN2

We expect the DOL will finalize the proposed rule later this year, with an effective date in early 2020. At this time, employers should consider how their salaried employees who fall within the white-collar exemption are compensated and whether changes may need to be made to their compensation or classification as exempt employees.

Footnotes:

FN1: https://www.dol.gov/whd/overtime2019/. The DOL’s proposed updated salary threshold is well below the Obama Administration’s planned increase to $913 per week ($47,476). See Department of Labor Told to Modestly Increase Salary Threshold for White Collar Overtime Exemptions Over Several Years, Rocky Mountain Employer Blog (Sept. 20, 2018), https://www.rockymountainemployersblog.com/blog/2018/9/20/department-of-labor-told-to-modestly-increase-salary-threshold-for-white-collar-overtime-exemptions-over-several-years. Employers have 60 days to comment on the proposed rule.

FN2: 29 C.F.R. part 541.