Fewer Employees May Be Classified As “Exempt” In The Near Future

07.01.15Baylee Olsen

Experts are now warning employers to start planning for an increase in overtime labor costs.  

The Department of Labor is currently reviewing new regulations, which among other things, will increase the salary threshold of an exempt employee to approximately $970 a week or $50,440 a year.

Following publication in the Federal Register, the proposed regulations will be up for public comment before the DOL issues final regulations.  For more information on these new proposed regulations, the DOL has published a fact sheet.

Employers are required to pay overtime when employees not exempt from the overtime regulations, work more than 8 hours a day or more than 40 hours in a workweek. Overtime pay must be at a rate not less than one and one-half times the worker’s regular rate of pay.

Employers will continue to be able to limit the amount of overtime compensation due to such employees so long as employers limit the number of overtime hours the employees work.