U.S. Dept. Of Labor Proposes Major Changes To Exempt Salary Status

July 2, 2015

The U.S. Department of Labor is issuing a proposed rule to increase the minimum salary requirements under the Fair Labor Standards Act for exempt employees, SmithAmundsen reports.

The law firm wrote on its blog:

The proposed rule sets forth guidance and requests comment on the following proposed changes:

Set the minimum salary level to qualify for the white collar exemptions at 40% of the national weekly earnings for full-time salaried employees ($921 per week or $47,892 annually but expected to increase to $970 a week and $50,440 annually in 2016);

Increase the minimum salary for Highly Compensated Employees to 90% of the national weekly earnings of full-time salaried workers ($122,148 annually);

Establish a mechanism for automatically updating the minimum salary to meet the exemption on a yearly basis. While the proposed rule sets forth different types of mechanisms for calculating the automatic update (using a fixed percentile of wage earnings or using the CPI-U (an economic indicator for measuring inflation)) they do not identify which mechanism will be utilized;

Increase the minimum salary level for exempt employees in American Samoa to $774 per week; and

Change 29 CFR 541.709 to increase the current base rate for employees in the motion picture industry from $695 to $1,404 per week.

The proposed rule is subject to a required comment period. A draft version of the proposal can be found here.