Challenges to New Salary Limit

03 Oct Challenges to New Salary Limit

Congress has passed a bill attempting to delay the deadline below, but Democrats are saying that the President will veto it. A multi-state lawsuit is challenging the deadline as well, but you want to be ready in case it does not stop enforcement by December.
Effective December 1, 2016, the Department of Labor is requiring the new minimum salary level for white collar, salaried, exempt positions to be $913 per week or $47,476 per year. The deadline is approaching quickly, so we recommend preparing to make the changes.
What can you do with exempt employees making less than the new salary level? Once you’ve identified the salaried exempt employees who are currently below the new threshold, you can do any of the following:
• Raise annual salaries to $47,476 to maintain exemption. ($913/week, $1826 biweekly, $1978 semi-monthly, $3,956 monthly); or
• Raise annual salaries to $42,729 with incentive payments paid monthly or quarterly (and totaling at least $4,747 per year) to reach the $47,476 annual amount; or
• Reclassify positions as non-exempt and either change to hourly pay or keep as salaried non-exempt. Tracking time and paying overtime will be necessary.

Call your Resource Alliance HR professional with any questions. We’re glad to help!

Scott Mastley, SPHR, MBA, is the Chief Human Resources Officer for Resource Alliance.
Scott is a consultant, not an attorney, so he shares his opinions, not legal advice, about increasing performance and limiting liability.