Brown noted that taking some initial steps sooner rather than later can go a long way toward triaging potential issues and creating a smoother transition plan. } The DOL will focus on theactual dutiesperformed by the individual to determine whether they fit the exemption criteria. The Obama DOL wanted a raise to $913 per week, but a court enjoined that increase and so the salary was raised from $455 to $684 a week. Part 541. The Society for Human Resource Management (SHRM) is pleased that the DOL has finalized the overtime rule. Employers should evaluate their systems for time-keeping, tracking overtime and paying bonuses, Hernndez said. The Fair Labor Standards Act requires non-exempt employees to report time worked and leave taken on a weekly basis. The new rate will take effectJan. 1,2020. For the outside sales employee exemption, there is no minimum salary requirement. The FLSAs general premise is that all employees are entitled to overtime pay for all hours worked in excess of 40 in a workweek. Develop a Training and Communication Strategy. In addition, employees who will be required to track their hours for the first timeas well as their managerswill need training on time-keeping procedures, she added. WebIn this instance the regular rate is obtained by dividing the $405 straight-time salary by 45 hours, resulting in a regular rate of $9.00. In many cases, the state criteria are harder to meet than the federal criteria. You can reach her at shelby.hicks-merinar@steptoe-johnson.com. As a result of the Colorado Overtime & Minimum Pay Standards Order, the minimum salary required to qualify for the executive/supervisor, administrative, and professional exemptions under state law increases to $865.38 per week on January 1, 2022. Here's what employers need to know about the new rule. part 541 with an effective date of January 1, 2020. It is critical that employers understand the FLSA in and out. } This means that while you must pay the employee at least 90% of the minimum salary throughout the year, (including nondiscretionary bonuses, incentive payments, and commissions), you have one pay period after the year to compensate the employee for any shortfalls that would classify them as non-exempt. The employee is then due additional overtime These salary requirements do not apply to outside sales employees, teachers, and employees practicing law or medicine. The Department of Labor raised the salary threshold requirement for. From COVID-19 reporting. Your state government may also have further requirements when it comes to paying overtime. Take a look at all employees classified as exempt and make sure that their duties, as actually performed, fit within one of the white collar exemptions, e.g. Make sure to not only implement the changes. Exempt Employees: Minimum Salary Requirements for 2022. In addition, section 7(g)(2) of the FLSA allows, under specified conditions, the computation of overtime pay based on one and one-half times the hourly rate in effect when the overtime work is performed. Washington, DC 202101-866-4-US-WAGE1-866-487-9243, Administrator Interpretations, Opinion and Ruling Letters, Resources for State and Local Governments, https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and. A blocked Obama-era rule would have doubled the threshold, but a federal judge held that Non-exempt Your session has expired. .agency-blurb-container .agency_blurb.background--light { padding: 0; } If state law and the FLSA overlap, the law which is more protective of the minor will apply. #block-googletagmanagerheader .field { padding-bottom:0 !important; } But thats not the case with new state or local wage-hour laws. However, final pay must be received by the first regular payday of the last pay period the employee worked. Maybe it's time to worry a little less about non-compliance right? After the 90-day period, employers are required to pay the full minimum wage. Job titles do not determine exempt status. The Obama administration sought to automatically adjust the threshold every three years to represent the 40th percentile of earnings for full-time salaried workers in the lowest-wage census region. But also communicate the federal overtime law and what it means. In December, the DOL announced it had plans to revisit the salary threshold for white-collar exempt employees under the FLSA. $(document).ready(function () { Need help with a specific HR issue like coronavirus or FLSA? With the publication of a proposed overtime rule expected as soon as next month, employment law attorneys are anticipating that the U.S. Department of Labor (DOL) will recommend higher salary level thresholds for the white-collar exemptions to the rule. Try aposter subscription serviceand receive updated mandatory notices that need to be posted for employeesas additional changes take placewith federal labor laws. DOL officials do not believe this is enough, as do worker advocacy groups who want it raised even higher, so more people will be eligible for overtime. Federal government websites often end in .gov or .mil. "Higher salary requirements could cut into their already slim profit margins or require them to reclassify a substantial number of employees. Salary level test, which refers to the actual monetary amount paid to the employee; Salary basis test, which simply means the worker is paid a set salary as opposed to an hourly rate; and. Under the state's exemption for highly technical computer employees, the employee may be paid by salary (at least $865.38 per week in 2022) or by the hour (under a state proposal, the minimum hourly rate would be $28.92 in 2022). Members may download one copy of our sample forms and templates for your personal use within your organization. The proposed minimum salary level for the Fair Labor Standards Act's executive, administrative and professional exemptions thus could be $913 per week or Before classifying and treating any employee as exempt from overtime, employers should confirm that the employee satisfies all applicable tests for overtime exemption under federal and state laws. This is an $11,908 jump from the old minimum, which was set in 2004. To learn more about FLSA Employee Classification Guidelines, how to classify employees, and the associated '"tests" with FLSA status, click here. ", [SHRM members-only toolkit:Determining Overtime Eligibility in the United States]. Learn how SHRM Certification can accelerate your career growth by earning a SHRM-CP or SHRM-SCP. Find the latest news and members-only resources that can help employers navigate in an uncertain economy. Your email address will not be published. Under the new rule, nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis Similarly, where an agreement provides for 6 hours pay at $13.00 an hour regardless of the time actually spent for work on a job performed during overtime hours, the entire $78.00 must be included in determining the employees' regular rate. You might consider raising their salary. .manual-search-block #edit-actions--2 {order:2;} It will continue to increase annually thereafter based on inflation. Critically, the nonexempt classification is not a reflection of the importance of a position. Also, an employer is not required to pay the full salary in the initial or terminal week of employment, or for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act. To request permission for specific items, click on the reuse permissions button on the page where you find the item. By Shelby A. Hicks-Merinar, Associate, Steptoe Johnson PLLC. Computer professionals may also be paid hourly if it is at least $27.63 per hour. In response, employers everywhere readied themselves for a potentially seismic shift. All records must be kept open for inspection by the Divisions representatives. It is refreshing to receive such great customer service and this is the 1st time we have dealt with you and Krosstech. Any employees who are not covered by the FLSA may be paid less than $7.25 an hour. blocked by a judge just 10 days before it would have been implemented, said Alfred Robinson Jr., an attorney with Ogletree Deakins in Greenville, S.C. It prevents an employee from entering into, The new year will bring an onslaught of California labor law changes after a busy legislative session. WebThe new minimum is going to be $684 per week or $35,568 per year. Deductions from pay are permissible when an exempt employee: is absent from work for one or more full days for personal reasons other than sickness or disability; for absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness; to offset amounts employees receive as jury or witness fees, or for military pay; for penalties imposed in good faith for infractions of safety rules of major significance; or for unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions. $('.container-footer').first().hide(); } The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. : If an administrative, professional, executive or professional computer employees weekly salary meets the minimum requirementwhich is $684 per weekthey are exempt from overtime pay. Save my name, email, and website in this browser for the next time I comment. p.usa-alert__text {margin-bottom:0!important;} if(currentUrl.indexOf("/about-shrm/pages/shrm-china.aspx") > -1) { Build specialized knowledge and expand your influence by earning a SHRM Specialty Credential. The minimum salary requirement for administrative, professional, and executive exemptions increased from $455 per week to $684 per week, or $35,568 per year on January 1, 2020. An employee's workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods. DURABOX products are manufactured in Australia from more than 60% recycled materials. , their work requires advanced knowledge in a certain type of field that is the result of specialized instruction or study. If the administration is serious about getting its changes to survive legal challenges, "the best course would be to be moderate in its approachand quick. Be clear that these changes are based on new government rules. Download our free white paper to learn more! The Fair Labor Standards Act (FLSA) provides guidance across areas such as employee classification, federal minimum wage, overtime, the definition of hours worked, recordkeeping requirements, posting requirements, pay schedules, final pay, and provisions regarding child labor. The2016 rule also called for an automatic increase in the salary threshold every three years. A core part of the FLSA and compliance with it is ensuring proper Employee Classification, there are three different types of classifications that workers or employees can be classified as: Employers need to know which category each employee or worker falls under. Homebase works great for all hourly teams, including restaurants, retail, healthcare, home and repair, and professional services businesses. 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