The White House just approved a proposal from the Department of Labor to raise the minimum salary for exemption to $55,068 per year. It’s currently at $35,568 per year, so this is quite a jump.
What does this mean for your business? Let’s break it down.
Salary exemption
Under the Fair Labor Standards Act, employees who work more than 40 hours a week are entitled to overtime. However, some employees are exempt from this rule under certain conditions.
The first requirement an employee must meet to be exempt from overtime is that they be paid on a salary basis–that is, they get the same paycheck every week (or pay period) regardless of whether they have worked 10 hours or 100 hours. The second requirement is that the check be a minimum salary–right now, it’s $684 per week. Under the new proposed rule, that would jump to $1,059 per week.
Once pay is secured at or above the minimum range, then the employee must meet the “duties test.” The duties test can be a bit complicated for some positions, but here is a brief explanation of what can qualify an employee for exemption:
To keep reading, click here: If You Manage Salaried Exempt Employees Earning Less Than $55,068 a Year, Your Life Is About to Become More Complicated