New threshold for exempt employees is coming

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Posted by Legal Team On May 31, 2019

Are you an “exempt employee” who isn’t entitled to overtime no matter how many hours you put in behind the desk?

Well, that may soon change. If the United States Department of Labor (DOL) has its way, the path to overtime may become available for a whole lot of salaried employees who are currently exempted.

Right now, the minimum salary of an exempt employee is only a paltry $23,660 per year — or just a little less than $455 per week. While that’s not the only requirement that goes into making an employee “exempt” from the rules that require an employer to pay overtime for more than 40 hours of work in a week, it is a significant one.

Those income thresholds, however, were set way back in 2004 by the Fair Labor Standards Act (FLSA), which means they are more than due for an overhaul. Under the DOL’s new proposal, the minimum threshold income for an exempt employee would be $679 per week or $35,308 annually. Above that point, the determining factors for exemption would still be an individual’s job duties test and salary basis test, which remain unchanged from before.

While this isn’t quite the increase that the Obama Administration had hoped to see — which would have pumped the minimum exempt income up more than double — it does increase the current minimum salary level for exemption by about 50%. The new rule also increases the threshold for “highly compensated employees” (who don’t fall under quite as strict of a job duties test as other exempt employees) by a little less than $50,000.

If you’ve been laboring under exempt status for a while, keep in touch with the new changes so that you know your rights to a fair wage. If your employer doesn’t make adjustments once this new rule passes (which is likely to be soon), you may need to contact an attorney for assistance.