White Collar Exemption Salary Requirement More Than Doubled

The three White Collar Exemptions are by far the most common asserted by employers to avoid paying overtime.  If an employer wants the apply the exemption to any employee, it must show that it pays the employee paid a minimum salary, and that the employee meets the particular duties test.  The most common duties tests are as follows:

Administrative:The employee is doing work that involves significant independent discretion and judgment (in other words, not just applying  a set of standards).

Professional: The employee’s job requires specific education such as a law degree or teaching degree.

Executive: The employee supervises two or more employees and typically has input into hiring and firing.

The big news is  that a new regulation is set to increase the salary level that an employee must be paid from $455.00 per week to $913.00 per week — annualized, that would be an increase from $23,660.00 a year to $47,476.00 per year.  There is a review period during which Republican members of Congress might attempt to block the new regulation, but that seems unlikely during an election year where the Republican nominee, Donald Trump, is courting blue collar workers.

Business groups complain that this measure could cost businesses and may insult employees who now have to track their time.  But the Fair Labor Standard Act overtime rules were originally intended to apply to most employees, but Vice President Biden notes that with inflation, it applies to only 7% of salaried workers today.

Each year, employees are deprived of billions of dollars in unpaid overtime wages.  Some of these overtime violations result from employers failing to track all time worked by paying people by the shift, or automatically deducting lunch periods where the employee does not get a minimum of 20 minutes to him or herself.  But abuse of the white collar exemptions also make for a large number of cases.

Maduff & Maduff has recovered millions of dollars in unpaid wages and overtime wages for employees improperly paid or misclassified.  And although retaliation for bringing an overtime claim is rare, it is illegal and we have successfully prosecuted companies for retaliatory acts.  If you believe that you are not being paid for all hours worked, or you are not properly classified, you need an employment lawyer.  Call us today.