New Minimum Salaries Needed To Qualify For FLSA Minimum Wage And Overtime Exemptions

Category: Fire Watch
Date: Oct 4, 2019 10:59 AM

The U.S. Department of Labor (“DOL”) announced the final version of its new exemption rule.  This DOL regulation increases the salary thresholds that qualify for the “white collar” and “highly compensated employee” exemptions to the Fair Labor Standards Act (“FLSA”).

The FLSA provides “white collar” exemptions for executive, administrative, and professional employees.  To qualify under one of these exemptions from the FLSA’s minimum wage and overtime requirements, an employee must first meet the DOL salary basis test.  Part of that test is a minimum salary the employee must receive.  Since 2004, the salary basis test required the employee to receive a minimum salary of $455 per week or $23,660 per year.  However, under this new rule, employees must now make $684 per week or $35,568 per year to qualify.

The FLSA also provides a “highly compensated employee” exemption, which covers well-paid personnel who perform some managerial duties.  This new rule also increases the highly compensated employee threshold from $100,000 to $107,432.

The new salary thresholds will take effect on January 1, 2020.  The new DOL regulation does not change the “duties” test, which an employer must also meet to exempt an employee from overtime.

NOTE: 

Agencies should evaluate which employees will remain exempt from the FLSA under these new salary thresholds.  LCW attorneys can assist agencies in reviewing FLSA compliance, and advising as to any associated collective bargaining duties.

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