THE FEDERAL DEPARTMENT OF LABOR ISSUES ITS LONG AWAITED RULING ON EXEMPTION THRESHOLD

As expected, the Federal Department of Labor (“DOL”) has issued new rules regarding the threshold “white collar” exemption from overtime pay.  The DOL has increased the minimum pay threshold from $23,660 to $47,476 per year.  The minimum threshold in New York State is already $35,000 per year.  The DOL has also increased the minimum salary for “highly compensated” employees from $100,000 to $134,004 per year.  The new rule will not take effect until December 1, 2016, but you should start to prepare to adjust to these increased thresholds.

Based on the new rule, if your Company presently has “exempt” employees, specifically supervisors and managers, earning less than $47,476 per year, to comply with Federal law, you will be required to adjust their compensation by either; a) increasing their salary to meet the threshold, or b) changing their status to “non-exempt” and paying them an hourly salary, and also paying them overtime when they work over 40 hours per week.  Similar adjustments will be required for the “highly compensated” employees.

To comply with the new rule, you should better educate yourself on the exempt vs. non-exempt status of your employees, and understand how to properly work within the law so your employees are paid properly, hopefully without having to increase the overall wages of your staff.

If you would like more information regarding the new rule, or would like to discuss a strategy for how to best comply with the law, please call my partner, Jeffrey Ettenger at 631-777-2401.