Employers Should Revisit Employee Duties and Salary Levels in Light of Changes
Navigant’s Sonya Kwon and Jeremy Guinta discuss the Department of Labor’s (DOL) new changes to the White Collar Exemption Rule.
On May 18, 2016, the DOL implemented a rule that will nearly double the minimum salary necessary for a worker to be classified as “exempt” under the White Collar Exemption provision of the Fair Labor Standards Act (FLSA). These changes will impact the minimum salaries an individual must make in order to be exempt from overtime and has the potential to cost employers billions of dollars. Now that the proposed rule is adopted and the salary threshold for the White Collar Exemption has increased, many employees could gain non-exempt status. Employers should revisit current employee duties and salary levels and determine which employees should be classified as exempt. It is important to be aware that the annual salary threshold may increase from year to year based on DOL’s methodology, which could lead to employees’ salaries rising or disqualifying employees from exempt status.