The U.S. Department of Labor has issued a notice of changes in regulations which would alter the rules as to which executive, administrative and professionals are exempt from overtime pay.
The Department last updated these regulations in 2004, and the current salary threshold for exemption is $455 per week ($23,660 per year).
The threshold would be changed to about $921 a week or $47,892 a year.
Since 1940, the Department’s regulations have generally required three tests to be met for one of the white collar exemptions to apply:
(1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed;
(2) the amount of salary paid must meet a minimum specified amount; and
(3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations.
With this proposed rule, the Department seeks to update the salary level required for exemption while allowing for future changes based on inflation levels.
The Department is calling for comments on this proposal which they will consider in making their determinations.
More details and additional proposed changes under consideration can be found here: