Big Changes Proposed for Exempt and Non-Exempt Employees
Recently, KRD had a firm meeting regarding our employee status that may be impacted by the new Fair Labor Standards Act (FLSA) proposed rule which broadens the overtime pay rule for currently exempt employees.
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Under the U.S. Department of Labor (DOL) current regulations, certain “white collar” jobs are exempt from the overtime requirement. For these jobs, employers need not pay overtime and, instead, can simply pay a set salary of at least $455 per week ($23,660 annually) for all hours worked if an employee also performs certain executive, administrative, or professional job duties.
The Proposed Rule
The proposed rule raises the minimum salary level for white collar exemptions from $455 a week to $970 a week in 2016 ($50,440 a year) – a greater than 50% increase in the minimum salary requirement to be considered exempt.
Although there are still outstanding questions on how commissions, bonuses, or modifying the current duties tests for exempt status will affect the exempt status, we decided it was still important to evaluate our own situation.
With the help of our Human Resources consultant, we evaluated titles, responsibilities, work hours, education and salaries of our employees. With potential changes to titles and responsibilities we feel we are ready to comply with the new law in the best way for our firm and employees.
While the final rule is not expected before 2016, we believe it is in your best interest to start planning for these proposed changes. Now is an opportune time to review your own business situation.