Last evening, (March 7, 2019), the Department of Labor (DOL) released its Notice of Proposed Rulemaking (NPRM), proposing to raise the salary threshold for white collar exempt employees from $455 per week ($23,660 annually) to $679 per week ($35,308 annually).
“White collar” refers to employees who perform primarily executive, administrative or professional duties. If employees’ regular salaries fall short of the required threshold, the DOL would allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to make up ten percent of the shortfall.
What does this mean for you, as an employer, and your business?
First, this rule new salary threshold rule may not apply to you or your employees.
The DOL is only proposing to raise the salaries of white collar, exempt employees. Although some businesses may choose to give non-exempt employees a raise, there is nothing in this proposed rule that would require non-exempt (or hourly wage earning) employees to receive a pay increase.
In addition, exempt salespeople are not covered under this proposed rule. For employers in states that allow the computer employee exemption (unlike Pennsylvania, which does not), exempt computer employees are, likewise, not addressed by the proposed rule.
Secondly, the rule does not require raises to be given to white collar exempt employees.
If this rule is made final, employers will need to determine whether white collar exempt employees paid less than $679 per week should be given a raise or be reclassified to a non-exempt status. A reclassification to non-exempt means, among other things, that the employees will be eligible for overtime for all hours worked over 40.
Finally, at this point, the NPRM is only a proposal.
No changes will become final until another Final Rule is released, which will follow a 60-day public comment period. If you would like to have your voice heard, consider making a public comment. The DOL has made what seems to be a concerted effort to hear out employers across the country during listening sessions and requests for information. If you would like to comment, you may do so over the next 60 days at www.regulations.gov, in the rulemaking docket RIN 1235-AA20.
We will keep you informed. If you have any legal questions, you may contact your own legal counsel, or you may contact me at firstname.lastname@example.org. I would love to hear from you!
The Eastern Pennsylvania Employment Log (EPELog) is a publication of the KingSpry Employment Law Practice Group. Jeffrey T. Tucker, Esquire, is our editor-in-chief. EPELog is meant to be informational and does not constitute legal advice.