In March 2014, President Obama issued a
memorandum to the U.S. Secretary of Labor directing the Secretary to modernize and streamline the existing overtime regulations for executive, administrative, and professional employees. The regulations, codified at 29 C.F.R. Part 541, provide the rules for the so-called “white collar” exemptions to overtime pay requirements, as well as the rules for classifying outside salespersons and computer employees.
The proposed rule was released early June 30th. The USDOL proposes to raise the minimum salary for exempt status under the white collar overtime exemptions from $455 per week (or $23,660 per year) to $921 per week (or $47,892 per year). The hike was less than many anticipated, including President Obama (who was promising a $50,400 minimum salary for exempt workers as of June 29th).
In addition, the USDOL proposes to raise the minimal level of total annual compensation for “highly compensated employees”—who are deemed exempt under federal law if they “customarily and regularly” perform any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee (even if such duty is not their “primary duty”)—from $100,000 to $122,148.
There were no proposed changes to the duties tests for exempt status, despite the anticipation that the USDOL would move from the more qualitative “primary duty” test to a quantitative, percentage-of-time-spent test.
Stay tuned for our more detailed analysis of the proposed new rules…
