On May 18th, the Department of Labor (DOL) finalized the proposed change to the salary requirements that apply to exempt white-collar employees. Under the new rule, the minimum salary increases from the previous $455 a week to $913 a week. If an employer fails to provide this minimum salary to an otherwise exempt employee, the employee will no longer be considered exempt and thus be eligible for overtime compensation.

The new rule is expected to effect 4.2 million workers who will now either be eligible for overtime pay or have their salary increased to the new minimum. Furthermore, under the new rule, the minimum salary will automatically be adjusted every three years based on overall growth in wages.

The new salary requirement goes into effect on December 1st. Employers must carefully evaluate all exempt positions with a weekly salary below $913 and either:

  1. Increase their salary to meet the new requirement.
  2. Change the employment classification to “non-exempt” and pay overtime.

Employers must make this determination by position and not on an individual employee level. For example, if two employees perform the same job, they should share the same employment classification as either exempt or nonexempt.

Click Here to view the DOL website about the new rule.