Last week, the DOL unveiled its new regulations aiming to increase the annual salary threshold to $35,000 for “white collar” overtime exemptions, up from the current $23,660 set in 2004. The DOL estimates that this will result in approximately 1.3 million additional workers now qualifying for overtime. The DOL also increased the “highly compensated worker” threshold from $100,000 to $147,414. Notably, however, the DOL declined to adopt the rule first proposed by the Obama administration and enjoined by a Texas Court in 2016 requiring reviewing and updating these values every three years. Instead, the exemption amounts will be reviewed on a case-by-case basis as traditionally done.
Although the regulations are scheduled to go into effect on January 1, 2020, employers should start examining their current list of exempt employees now. Those who were classified as exempt and fall between the old and new values may be eligible for overtime and need to be reclassified.
Exemption classifications can be a complicated subject and may require expert analysis to limit liability. Employers should take care before making any decisions concerning employees’ classification status, and should seek professional assistance before doing so as to limit wage and hour law liability.