You’ve probably heard of the proposed changes regarding white collar exemptions by now. And, as a business owner, you’ve probably exhibited some signs of mild panic: Do I have to make the changes now? Are they for certain? When will the changes take effect?
We’ve heard your questions. The “what’s?” and “when’s?” are our bat signal, so to speak.
We’re here to explain what the proposed changes are & describe the process to come— HR superheroes to the rescue!
So before you start running through the streets shouting expletives into the void, let’s take a look.
First, let’s review the proposed changes…
• On June 6, the Department of Labor (DOL) published a notice of proposed changes to the federal Fair Labor Standards Act (FLSA) rules regarding executive, professional, and administrative exemptions (also called white collar exemptions).
• Currently, overtime rules are as follows: employers are required to pay all employees covered by the FLSA time-and-a-half for any hours they work beyond 40 hours in a single workweek. However, executive, administrative, and professional workers (white-collar workers) are “exempt” from this if they:
o Are salaried
o Satisfy the “duties test”
o Earn more than $23,660 per year.
• The proposed changes increase the minimum salary for exempt white collar workers to $50,440 per year, more than double the current number.
• With this increased salary requirement, it’s expected that more than 5 million currently exempt, salaried workers will no longer be exempt.
What does this mean for you as a business owner?
This is a substantial change that will affect most U.S. business owners. That being said, the last time large revisions were made to the FLSA (2004), it took 13 months after the announcement for the final rules to actually be drafted. So it could be a long time before you have to make any changes at your business. (We’ll be sure to keep you posted as any new developments occur.)
Visit our blog to read more on this topic; we explain what's next in the rule-making process & more.
