In response to the final overtime rule, which increases the minimum salary level to qualify for the white collar exemptions under the Fair Labor Standards Act (“FLSA”), employers must begin to evaluate and alter their current employee classifications and pay structures in preparation for the rule’s December 1st effective date. For many employers, it may not be possible to raise every exempt employee’s salary level to the new minimum of $47,476.00, over double the current threshold level of $23,660.00. If employers cannot raise salary levels, exempt employees will have to be reclassified as non-exempt employees entitled to overtime pay. This can be a very challenging situation for employers because many exempt employees are expected, and regularly do, work a certain amount of overtime each week to complete the required responsibilities of their positions. Furthermore, exempt employees are used to being paid on a salary basis with some level of certainty in their take home pay.
To address these issues and create some predictability for both the employer and the employee, one option is to implement a compensation structure that pays certain non-exempt employees an annual salary factoring in a certain amount of overtime. The FLSA permits non-exempt employees to be paid on a salary basis as long as Continue reading
The day that has been looming over employers for the past 2 years since President Obama directed the U.S. Department of Labor (“DOL”) to update and modernize the existing Fair Labor Standards Act’s (“FLSA”) white collar exemptions has finally arrived. Today, the DOL released its