On May 18, the U.S. Department of Labor (DOL) released its highly anticipated Final Rule setting new Fair Labor Standards Act (FLSA) salary requirements for various FLSA exemptions. The Final Rule, which becomes effective December 1, 2016, significantly increases the minimum weekly salary that must be paid to satisfy the FLSA’s “white collar” exemptions (e.g. executive, professional, and administrative).
In addition, the Final Rule increases the annual compensation amount that must be paid to satisfy the “highly compensated employee” exemption. Under current rules, “white collar” employees must be paid at least $455 per week ($23,660) annually to be exempt, and an exempt “highly compensated employee” must have annual compensation of at least $100,000. On December 1, the salary requirement for “white collar” workers will more than double to $913 per week ($47,476 annually) and “highly compensated employees” will need to earn at least $134,004 per year to remain exempt.
The Final Rule will impact millions of employees around the country who are currently “exempt” but, absent a salary increase, will become non-exempt and eligible for overtime pay on December 1. While exempt employee salary raises are one compliance tool, there are other compliance options available that may help to minimize the impact of the Final Rule on payroll costs. With about six months to go before the Final Rule becomes effective, employers should start proactively reviewing their workforce classifications and planning for compliance now.
As you begin your organization’s compliance planning, we invite you to join us for a presentation by GPM employment law attorneys Dorrie Larison and Matthew Webster on the following:
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Gray Plant Mooty is recognized as one of the leading corporate law firms in Minnesota and one of the top franchise firms in the world. Our roots go back to 1866. Today, we are a full-service firm with nearly 180 attorneys and offices in Minneapolis and St. Cloud, Minnesota; Washington, D.C.; and Fargo, North Dakota.