Many States dispute the DOL’s (Department of Labor) authority to set a minimum salary threshold for exempt staff  to not be paid overtime for hours worked in excess of forty hours per week.  In the past the States were willing let the issue slide as the threshold was low enough to not impact labor or compliance costs, but when the amount was going to more then double, the willingness to accept the DOL’s authority disappeared.

In November of 2016 a new law would have increased the minimum salary (overtime for exempt staff) from $23,660 to $47,476, but twenty states filed a request for an emergency temporary injunction that was granted by the 5th Circuit Court.

The DOL is still unsure of the direction the 5th Circuit Court plans to go, but plans on reviewing the minimum salary requirement sometime this month and issuing a revised regulation.  It is believed that the DOL will adopt a minimum salary of approx. $33,000 annually and is based on US Labor Department Secretary R. Alexander Acosta’s statements during his confirmation hearing.

If your company does have salaried employees we would recommend a review of the requirements for an employee to be classified as exempt and then keep monitoring for any updates to changes that could be coming from the DOL in the next couple of months.

We will continue to monitor and will post an update to this blog when the DOL makes a decision on the salary threshold and don’t hesitate to contact us if you have questions or need more information about current or future overtime rules.

In the meantime, here is a quick summary of the requirements and click here for the full pdf of the DOL regulations:

Executive Exemption

  • Primary duty must be managing a company, department or subdivision
  • Paid a minimum of $455 per week or $23,660 annually
  • Direct the work of at least 2 or more employees
  • Have authority to hire, fire or promote

Professional Exemption

  • Primary duty must require advanced knowledge & work is intellectual in character
  • Paid a minimum of $455 per week or $23,660 annually
  • Work requires exercise of discretion and judgement
  • Knowledge must be in a field of science or learning
  • Knowledge must come from prolonged course of instruction (typically a 4yr degree)

Administrative Exemption

  • Primary duty must be office or non-manual work directly related to management of company
  • Paid a minimum of $455 per week or $23,660 annually
  • Work includes the exercise of discretion and judgement with respect to matters of signifigance