Since last fall, we have been monitoring the issuance of a proposed rule from the Department of Labor (DOL) which had been slated for March, 2019. This change would implement significant changes to exempt classifications, particularly to the minimum salary threshold for white collar exemptions.
The most recent final rule, proposed under the Obama administration, would have increased the minimum salary for exempt employees from $455 per week ($23,660 annually) to $913 a week ($47,476 annually). This ruling was blocked as the jump was deemed to be too excessive and supplanted the exempt duties test.
The new ruling increases the minimum annual salary from $23,660 to $35,308 and as of now, there are no proposed changes to the duties test (criteria a position must exhibit/perform in order to meet the exempt classification).
While there may be some additional changes to the proposed rule and there may be some time before this rule takes effect, now is the time to start preparing for the changes. Below is a quick checklist that all employers should implement sooner than later:
- Review and update all exempt positions to ensure that the duties accurately match those in the Job Description.
- Compare exempt positions duties to the Department of Labors and your State’s tests for exempt status (i.e. executive, administrative, professional, outside sales, and computer employees).
- Create a spreadsheet of your current exempt employee’s salaries, identifying those that would be affected by the proposed minimum salary threshold.
- Discuss and decide how those positions should be modified to comply with proposed rule. Generally, the decision would be to either raise the compensation to match the proposed rule or move those positions to hourly. The latter would then require those employees and the employer to track employee’s time and pay overtime in accordance with federal and state law.
You and your HR department don’t have to take on this daunting task alone. HRCentral is here to help by evaluating your job descriptions, identifying which positions are affected by the proposed change, and provide advice on the best course of action. Don’t wait until it’s too late, start planning for new rules today!