By: Scott J. Connolly and Sandra E. Kahn
On November 22, a federal judge in Texas issued a preliminary order that temporarily blocks the U.S. Department of Labor (DOL) from implementing changes to the salary basis for white collar overtime exemptions. The new salary rule, which was to become effective on December 1, 2016 would have required employers to increase exempt employees’ minimum salary from $23,660 to $47,476. The preliminary court order blocking the rule appears to apply to all public and private employers nationwide.
Find out how the judge’s order will affect the new salary rule, which was to become effective on December 1. Read this month’s Employment Law Alert.
By: Sandra E. Kahn
On December 1, 2016, any employees who earn less than $47,476 annually will be entitled to overtime and must be treated as non-exempt, as per the U.S. Department of Labor’s final rule (“Final Rule”).
Don’t wait any longer to address this critical change in the law.
Find out how the Final Rule will affect your current employee classifications and pay practices, and the consequences of not complying with the law.
Read this month’s Employment Law Alert.
By, Sandra E. Kahn
On May 18, 2016, President Obama announced the publication of the U.S. Department of
Labor’s final rule (“Final Rule”) updating the overtime regulations, and providing that employees who earn less than $47,476 annually will be entitled to overtime.
The federal Fair Labor Standards Act (“FLSA”) “white collar” exemptions are familiar to most employers. Under the FLSA, employees must be paid the minimum amount required by the statute on a salary basis, and the employee’s job duties must primarily involve executive, administrative, or professional duties. The Final Rule changes only the salary basis test, leaving in place the existing duties test.
June’s “Tip of the Month” addressed the importance of paying an exempt employee on a salary basis in order to maintain the employee’s exemption from the overtime requirements of the federal Fair Labor Standards Act (“FLSA”). It also addressed the way in which making a deduction from an exempt employee’s regular paycheck risks the loss of the employee’s “salary basis” and exempt status. This month’s “Tip of the Month” examines what happens to an employee’s “salary basis” and exempt status when an employer adds to, instead of deducting from, an employee’s regular paycheck.
Unlike making a deduction, making an addition to an employee’s paycheck does not jeopardize the employee’s status as “paid on a salary basis.” Department of Labor regulations state that an employer can provide an exempt employee with additional compensation without losing the exemption or violating the salary basis requirement, so long as the employee’s pay includes a guarantee of at least a minimum weekly amount of $455 or greater.
Thus, an exempt employee who receives sales commissions on top of a base salary, or an exempt employee who receives additional “overtime” pay for time worked beyond his or her regular schedule, does not lose his or her “salary basis” status and as a result remains exempt from the overtime requirements of the FLSA.
For more information on this topic, please contact a member of the Employment Law Group.