Recently the U.S. Department of Labor (“DOL”) came out with proposed regulations that will significantly change the law governing certain “white collar” workers who are exempt from minimum wage and overtime pay. Currently, certain employees can be classified as “exempt” from minimum wage and overtime pay requirements. One of the most common exemptions is the “white collar” exemption which applies to executive, administrative, and professional employees. The new proposed regulations will more than double the current minimum salary level for exempt employees to keep their exemption and allow employers to not pay overtime from $455 per week ($23,660 annual salary) to $921 per week ($47,892 annual salary).
If these proposed regulations are adopted, employers will need to be aware of these changes and make sure that their employees are correctly classified as “exempt” or “non-exempt” under the new rules. Practically speaking, many more employees will be eligible for overtime unless their salaries are greatly increased. In fact, the DOL estimates that over 4.5 million workers may lose their “white-collar” exemption under the regulations. Employers will need to keep careful time records for employees who may lose their exemptions and will want to analyze the hours of those employees working under the “white-collar” exemption to determine whether a salary increase or overtime pay is the best way to provide compensation under the new rules.