Do you know what the salary amount is for your lowest paid exempt employee? Is it below $35,308?
If the new Department of Labor (DOL) proposed overtime rule passes, this would be the new white-collar exception amount. This amount is higher than the current $23,660 requirement but lower than the now-blocked $47,476 that was adopted by the Obama administration in 2016.
If the new regulation passes, employers must be prepared to give employees below the set salary amount an increase or re-categorize them as a non-exempt employees and pay overtime for hours worked over 40 in a workweek. The DOL is estimating this could affect over a million workers' classifications and/or wages.
In addition to the salary levels test, employees must also pass a duties test to be classified as an exempt employee. The duties test is not the employee’s job title. Following is an overview of the job duties required for exempt status:
Executive Job Duties include:
- regularly supervises two or more other employees, and also
- has management as the primary duty of the position, and also
- has some genuine input into the job status of other employees (such as hiring, firing, promotions, or assignments)
Professional Job Duties typically require advanced knowledge through specialized education beyond high school and college. Position examples in this category are lawyers, teachers, doctors, dentists, pharmacists, and other such disciplines.
Administrative Job Duties are the toughest positions to correctly classify. The regulatory definition provides that exempt administrative job duties are:
- office or non-manual work, which is
- directly related to management or general business operations of the employer or the employer's customers, and
- a primary component of which involves the exercise of independent judgment and discretion about matters of significance
For additional guidance classifying employees correctly, refer to the FLSA website or join our free April HR webinar, during which this topic will be discussed.
Attend our complementary webinar to find out
what every employer should know about properly classifying employees.
Classifying & Paying Exempt Employees
Wednesday, April 24 at 11:00am PDT
When registering for the session, please ensure that you enter ‘Bennett/Porter & Associates’ in the registration field that reads “Please provide the name of the company that referred you to this webinar.”