Employees who make less than $35,568 are now eligible for overtime pay under a final rule issued by the U.S. Department of Labor (DOL). The new rule will raise the salary threshold to $684 a week ($35,568 annualized) from $455 a week ($23,660 annualized). The new rule will prompt employers to re-classify approximately 1.3 million currently exempt workers to non-exempt status and raise pay for others above the new threshold.
However, the exempt salary minimum by itself doesn’t classify an employee as exempt. The salary level is one of three tests used to determine employee exempt status.
Generally, exempt employees are those who are paid a yearly salary and not subject to overtime hours. In order to qualify for an exemption, employees must meet the following (3) test criteria:
• Be paid at least $23,600 per year (or $455 per week).
• Be paid on a salary basis
• Perform exempt job duties. Exempt employees generally perform relatively high-level duties regardless of job title. These employees are referred to as “white collar” workers because they are highly skilled and formally trained professionals who typically perform job duties in an office setting. Many white-collar workers either provide services to clients or businesses, corporations or government agencies.
Non-exempt employees are typically paid by the hour, and not on salary. Plus, those working over 40 hours each week should receive time and one-half of their regular pay rate for each hour of overtime worked.
Job titles do not determine exempt status. To be considered for exemption, an employee’s specific job and salary must meet all the requirements of the DOL’s regulations. Check out the DOL’s Fair Pay Fact Sheets for more detailed information about the specific duties that must be performed in order to meet the requirements of the white-collar exemptions.
For additional information, visit the DOL’s Wage and Hour Division Website: http://www.wagehour.dol.gov and/or call their toll-free information and helpline at 1-866-4USWAGE (1-866-487-9243).