DOL Issues Proposed Rule to Make Millions of Previously Exempt Employees Non-Exempt
Currently, employers are not required to pay overtime (time and a half) to “exempt” employees who earn at least $23,660 per year ($455 per week). Exempt employees are those employed in bona fide executive, administrative, computer and outside sales positions. (For more info, check out http://www.dol.gov/whd/regs/compliance/fairpay/fs17d_professional.pdf)
That could change rather drastically. The DOL has issued an anticipated rule that would more than double the salary cap to $50,440 per year. That means, even if you have employees in otherwise exempt positions (managers, administrators), you must still pay them overtime unless they earn at least $50,440 per year.
But don’t get out your checkbooks yet. The rule is still subject to what will presumably be a lengthy public comment period. Naturally, business groups will oppose the measure as a threat to job creation, while labor groups will applaud expanded overtime benefits. Indeed, Jared Bernstein, a former White House economist, declared: “I can’t think of any other rule change or executive order that would lift more middle-class workers.”
The rule would likely go into effect in 2016, so stay tuned. In the meantime, employers, if you have any questions about this often tricky area of employment law, please do have your HR professional give us a call.