According to multiple sources, the U.S. Department of Labor (DOL) has changed the threshold for overtime exemption to around $47,000. When the DOL issued its proposed overtime regulations released in July 2015, the threshold was $50,440.
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The $47,000 figure would be approximately twice the current minimum salary requirement for overtime exemption. In light of this news, BLR® consulted with a few wage and hour experts for their thoughts.
"It appears that the DOL may be backing off their original plan to benchmark the minimum salary level on the 40th percentile level. We’re not sure whether this means that the new minimum salary will be fixed for another period of time or whether it will change from year to year as was originally proposed," Susan Fentin, of Skoler, Abbott & Presser, P.C., in Springfield, Massachusetts, told BLR.
"We strongly recommend that if you’re inclined to raise an employee’s wages to maintain their exempt classification you also take this opportunity to redo their job descriptions and be sure that they meet the appropriate exemption. Changing the minimum salary level might not address all the problems and you might find yourself with a misclassification problem at a higher annual wage," says Fentin.
"Use this as an opportunity to solve any preexisting FLSA problems you have—things like current misclassifications," added Charlie Plumb, of McAfee & Taft in Tulsa, Oklahoma. "Do an audit as part of your preparation for the new regs and fix any problems you have."
We will provide you with more updates as they become available. The new regs are expected within the next 2 to 3 weeks.