The U.S. Department of Labor (DOL) has issued its final rule regarding minimum salary requirements for the “white collar” (executive, administrative, and professional) overtime exemptions. CIRT had actively participated in the rulemaking, filing comments on behalf the membership and the industry. The new rule goes into effect on January 1, 2020.
Per the rule: annual salary level for the executive, administrative, and professional exemptions will increase to $35,568. The new minimum salary represents a fifty percent (50%) increase from the current level of $23,660. [However, it is well below the $47,476 salary level proposed by the Obama administration]. Among the matters DOL rejected, were proposals to establish regional salary levels or separate industry-specific salary levels. Along with the general standard minimum salary level for exempt employees, the rule also addressed the matter of highly compensated employees (HCEs), setting that new minimum level at $107,432.
Employers will be permitted to use nondiscretionary compensation, including commissions, to satisfy up to 10% of the new standard salary level. This nondiscretionary compensation may be paid annually rather than quarterly, providing employers with more flexibility in paying exempt employees nondiscretionary bonuses and commissions to satisfy the salary level requirement. [For further details see, Notice of DOL Final Rule at 84 FR 51230 (09/27/2019)]