The latest word from the Department of Labor (DOL) is that the long-discussed changes to the Fair Labor Standards Act (FLSA) — significantly increasing the salary basis threshold for most exemptions — will be finalized by July 2016. The regulations will likely be effective 60 days later, or September 2016.
What does this mean for employers? It’s time to start thinking about revising your exempt positions now. As a quick refresher, the current threshold is a salary of $455 per work, or $23,660 per year. The new rules will likely increase the threshold to about $50,000 per year. Employers need to review any exempt positions currently earning between $23,000 and $50,000, and consider whether it makes more sense to convert the work to a non-exempt overtime-eligible position, or instead bump up the salary in order to meet the new threshold.
And keep in mind– the salary threshold is just one part of the test. This is probably also a good time to review whether your salaried position satisfies the duties componentof the FLSA exemption.
This analysis is complex and dangerous — the penalties for wage and hour violations are significant. Proceed with caution, and don’t be afraid to ask for help from your legal counsel!
Contact info: Meredith S. Campbell Co-Chair, Employment and Labor Group, Shulman Rogers mcampbell@shulmanrogers.com | T 301.255.0550 | F 301.230.2891
