K&C’s Employment Law Alert – October 2019
EMPLOYERS FACE TIME CRUNCH TO COMPLY WITH NEW DOL SALARY RULE
Absent some unexpected Court intervention at the last minute, effective January 1, 2020, the minimum salary threshold required for workers to be exempt from overtime under the “white collar” exemptions will be raised to $35,568 per year or $684 per week. That threshold is roughly a $12,000 increase from the current level. The DOL estimates that approximately 1.2 million workers currently exempt will not have a high enough salary to remain exempt without a salary raise. This gives employers approximately 2 months to either raise salaries of some of their exempt salaried employees or reclassify them as non-exempt, making them eligible for overtime.
So now is the time for employers to review their pay practices to make sure that their employees will be properly classified as exempt or non-exempt from overtime. This means that not only should employers make sure that exempt employees are receiving the new required salary, but also that exempt employees are performing appropriate duties to be exempt as either executive, administrative, or professional salaried employees. To do this, care should be taken to examine job duties closely to make sure that all aspects of any one of these exemptions are met.
An effective self-audit now can actually help employers avoid potential wage-hour risks in general. Risk avoidance in this area is significant because, as employers who have faced a DOL audit know, noncompliance with wage-hour rules can be one of the most expensive headaches an employer will ever face. When we contacted the former Regional Enforcement Coordinator for the DOL Wage-Hour Division, Patricia A. Slate, she emphasized this point in saying, “Employers should take advantage of this opportunity and review all of their wage-hour practices to make sure they are in compliance with the law. Proactive steps under the guidance of counsel can avoid expensive liability down the road.” Ms. Slate also pointed out that since this increase is not as dramatic as the one proposed under the Obama Administration, it is very likely to go into effect as scheduled.
To help employers get ready for this change and otherwise make sure their employment practices are in order, on November 21, 2019, K&C’s 36th Annual Employment Law Update will include a workshop on how to conduct an effective self-audit. This seminar will be held at the Virginia Beach Convention Center and will include a number of other timely topics. The ever-popular “K&C Answer Booth” will be open for business and a number of representatives from relevant government agencies will be on hand to provide their valuable perspectives. The appropriate “Gambling Casino” theme will be used to help employers “deal” with all of the risks they face in the workplace and one lucky attendee will win a $350 visa gift card at the end of the day. To register, click here or call 757.624.3232.
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2022.