NEW FLSA REGULATIONS:  WHAT IT MEANS FOR YOU!

The Department of Labor (DOL) released final regulations regarding the Fair Labor Standards Act (FLSA) “white collar” exemptions.  Here is what you need to know:

  • Increases the minimum guaranteed salary to be exempt from $455 per week to $913 per week.
  • Becomes effective December 1, 2016.
  • The DOL will evaluate the salary basis test every 3 years beginning January 1, 2020 and make adjustments to the rate in order to maintain a threshold equal to the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region.
  • The DOL is instructed to post the new salary levels 150 days in advance of their effective date beginning August 1, 2019.
  • Permits employers to use non-discretionary bonuses and incentive payments (such as commissions) to satisfy up to 10% of the new standard salary level.
  • If the employer chooses to use non-discretionary bonuses and incentive payments to satisfy up to 10% of the new salary requirement, the bonus/incentive must be paid on at least a quarterly or more frequent basis and allows the employer to make “catch-up” payments.
  • Defines “highly compensated employee” (HCE) as one whose annual salary is $134,004 annually. This amount will also be evaluated and adjusted every three years.
  • HCE’s must receive at least the full standard salary amount each pay period without regard to the payment of a non-discretionary bonus/incentive.
  • The duties tests for the white collar exemptions have not been revised.
  • The DOL has issued fact sheets for certain industries particularly affected by this rule change:

Have questions?  Call or email Christine Crews [email protected] 407.260.6556.

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