There are individuals in every workplace in the United States who are paid a salary and considered exempt from pay for overtime after 40 hours in a work week. While the issue of whether employees are properly classified as exempt is always an issue that could potentially arise, exempt status is more likely to be called into question if and when the U.S. Dept. of Labor (DOL) goes forward with a proposed increase in the salary amount required to qualify as exempt. It’s been reported that such a proposed rule could be issued early this year. Therefore, now might be a good time to discuss some of the issues likely to arise if the salary amount is changed.
In May 2016, the DOL proposed to more than double the current $23,660 per year threshold for exempt status. The proposed increase to $47,476 was effectively blocked by court action. It remained blocked as the Trump administration took office and remains so today. The new Secretary of Labor, Alex Acosta, early in his tenure stated that a revised rule would likely be issued at a later date. He also commented that while he didn’t support such a drastic increase, some increase was needed to keep pace with business reality. The last change occurred in 2004. According to some reports, any new rule is likely to propose a salary threshold in the range of $31,000 to $33,000 or so. This would require that an exempt employee be paid a weekly salary of approximately $600 versus the current salary threshold of $455 per week.