Many of you will recall that in May 2016, the Department of
Labor issued new rules that essentially doubled the salary and compensation
levels needed for employees who are exempt under the executive, administrative
and professional exemptions. The new rules
were to take effect December 1, 2016 and increased the standard salary level
from $455 per week to $913 per week. However,
right before the new rule was to take effect, a federal court issued an
injunction that enjoined the new rules from going into effect.
On March 7, 2019, the DOL finally issued its new proposed
rule that proposes the following changes:
Increase the salary level from $455 to $679 per
week, or $35,308 per year;
Periodic reviews to update the thresholds every
4 years only after receiving comments on proposed changes (in the 2016 rule, automatic
adjustments were mandated);
As in the previous rule, the DOL is not changing
the duties test; and
The Highly Compensated Employee level would be
increased from $100,000 to $147,414, of which $679 must be paid weekly on a
salary or fee basis.
There is a 60-day period in which written comments must be
submitted to the DOL. It is anticipated
that the DOL will attempt to publish a finalized version of the rule before the
2020 election. Lawsuits are very likely
to be filed by worker advocacy groups as well as business groups. Also, the Democrats in Congress are working
on legislation that would enact the 2016 rule into law.
As always, we will keep you updated as events unfold in this extremely important legal area. For now, the changes are not expected to occur until at least the fourth quarter of 2019 and most likely early to mid 2020. However, all employers must keep in mind the proposed new threshold in hiring and/or promoting employees into salary positions and deciding upon raises.
The employment and labor attorneys at RBS are well versed in all matters relating to wage and hour compliance so please contact us with any and all questions.