On July 1, 2015, the Obama Administration, along with the United States Department of Labor, issued a proposed rule change estimated to affect 5 million salaried workers and their employers. The proposed change directly affects workers whose positions can be classified as administrative, executive or professional.
The Department of Labor is proposing to update which white collar workers (executive, administrative, professional) are entitled to the Fair Labor Standards Act’s minimum wage and overtime pay protections. The current salary threshold for exemption is $23,660 per year, while the proposed change would require businesses to pay those employees a salary of $50,440 beginning in 2016. The threshold provides the minimum amount of compensation which must be provided for those given workers without requiring the company to pay overtime.
While this proposed change is not effective immediately, it should not be overlooked. Businesses which may be impacted by the change should begin to think about the fact that they will need to provide raises or convert employees from salary to hourly. Also recommended would be auditing exempt positions to ensure that they still qualify as such.
For more information on how this proposed change could affect your business, visit The Department of Labor’s website, or give us a call at (616) 393.0398