Today, the Department of Labor issued the long-awaited proposed rules re-defining the requirements of white collar exemptions under the FLSA. The key provision of the proposed rule increases the minimum salary required in order for one to qualify as exempt from overtime payments from approximately $23,660.00 per year to approximately $50,440.00 per year. This is a dramatic increase that is assured to cause many employees to lose their status as exempt. The DOL estimates that as many as 40% of salaried employees will no longer be eligible for the exemption.
Oddly, the proposed rule does not contain any changes to the “duties” test for exempt workers. It is probable that changes to the duties test, as well as changes to the proposed salary level, will be submitted during the public comment period, and that the proposed rules will be significantly modified.
This rule is not yet the law of the land. It is subject to a public comment period and will probably not become effective until 2016. However, employers should begin to plan for a significant increase in the amount of salary that they must pay to their exempt employees in order for them to maintain their exempt status.