A Bit of Good News for Employers Regarding Increases in Exempt Salary Rates

Authored by Karen E. Milner

May 04, 2016

The Department of Labor will soon publish its final rules regarding the increase in salary rates required for employees to qualify as exempt under the Fair Labor Standards Act’s administrative, professional or executive employee overtime exemptions. The good news for employers, according to Politico Pro, is that the new minimum annual salary to qualify for exempt status will be $47,000, less than the anticipated $50,440, which had been in the proposed rule published in the July 6, 2015 Federal Register.

While the $47,000 threshold is a 99% increase from the prior $23,660 annual salary required to meet the exemption, the revision downward from the initially proposed $50,440 amount may ease a small amount of the added financial burden that employers will have to bear once the regulations are issued. The final regulations are expected to be issued sometime between May and July. After publication of the final rule in the Federal Register, employers will have sixty days to begin complying with the new regulations.

We can assist in transition planning for all employers. Transition alternatives may include reclassifying some currently exempt employees to non-exempt status, increasing weekly salaries of employees who are close to the threshold, and other alternatives.

If you have any questions about how you and your company can best prepare for the implementation of the final rules or any other wage and hour matter, please do not hesitate to contact Karen E. Milner, R. Michael Lowenbaum, Robert S. Seigel, Corey L. Franklin, Christopher M. Sanders, David P. Frenzia, Whitney P. Cooney, or Jamie M. Westbrook.

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