The U.S. Department of Labor (DOL) has released a final rule, effective December 1, 2016, to update the regulations governing which executive, administrative, and professional employees (referred to as "EAP" or "white collar" workers) are entitled to the federal Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay protections.
The FLSA provides an exemption from both minimum wage and overtime pay for employees employed as a bona fide executive, administrative, and professional employees (among others). The current regulations implementing the exemption have generally required each of three tests to be met for the exemption to apply:
"Highly-compensated employees" (HCEs) who are paid total annual compensation of $100,000 or more and meet certain other conditions are also deemed exempt.
Note: Job titles never determine exempt status. Receiving a particular salary, alone, does not indicate that an employee is exempt. Rather, in order for a white collar exemption to apply, an employee's specific job duties and earnings must meet all of the applicable requirements provided in the regulations.
A comparison table of the current regulations, proposed rule, and final rule has been provided by the DOL. Among other things, the final rule:
The DOL is not making any changes to the current duties tests. For more information, please refer to the DOL's website on the final rule, which offers employers comprehensive resources including fact sheets, Q&As, guidance for businesses, and more.
Our section on the Fair Labor Standards Act features additional information on exemptions from the law's minimum wage and overtime requirements.
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