Tag Archives: Administrative Exemption

Check to See if the Minimum Required Salary For Exempt Employees is Increasing In Your State

While the minimum salary requirements for “white collar” employees (executive, administrative, or professional employees) is not changing in 2018 (at least not until/unless the Department of Labor announces a new Overtime Rule), there are several states where the minimum salary requirements for exempt employees is increasing in 2018 (December 31st for New York employers).

These increases (i.e. in Alaska, California, Colorado, Maine, New York, and Oregon) are occurring because the minimum exempt salary rates for these employees (as established under state law) are scheduled to increase in 2018 (December 31st for New York employers).

Under the Fair Labor Standards Act (FLSA), the minimum salary requirements for white collar employees is as follows:

Payment Schedule Minimum Salary
Weekly $455
Bi-Weekly $910
Semi-Monthly $985.83
Monthly $1,971.66
Annual $23,660

Continue reading Check to See if the Minimum Required Salary For Exempt Employees is Increasing In Your State

UPDATE: The DOL Overtime Rule Is Officially Dead!

Employers across the country can breathe a collective sigh of relief.  On August 31, 2017, the US District Court for the Eastern District of Texas issued a final ruling that officially invalidates (or kills) the DOL Overtime rule.  In short, the Court found that the DOL had “overstepped its bounds” by setting such a high salary level for the executive, administrative, and professional exemptions.

What does this mean for employers?

In short, this ruling means that the exempt salary threshold for executive, administrative, and professional employees remains at $23,600 per year (or at the established state level, if the employer is in a state that has implemented a higher exempt salary threshold).

Final thoughts

One thing of note, the Court clarified that its ruling did not mean that the DOL could not set any minimum salary level as one of the tests for determining whether an individual is exempt from overtime under these exemptions.  With this in mind, there remains a possibility that the DOL may attempt to increase the minimum salary level in the future.  However, if that increase were to occur, it would most likely be a much less drastic increase (and not a doubling of the existing salary level).

At the present time, the DOL has not announced any intention to seek an increase of the salary level.  That being said, employers should prepare for an eventual increase to the exempt salary threshold, even though it isn’t clear what the final number will be.

Bank Loan Underwriters “Exempt” Under Fair Labor Standards Act

On August 12, 2015, a federal district court in California ruled that a bank’s underwriters were exempt from overtime pay under the Fair Labor Standards Act (“FLSA”).  Specifically, the court held that the bank’s underwriters qualified for the “administrative exemption” as a result of the amount of discretion they exercised in approving and declining loans, and in requesting exceptions to the lending criteria.

In general, the FLSA provides 6 exemptions to overtime pay, among which, is an administrative exemption.  In addition to meeting this categorical requirement, an employee must also meet the requirements for salary level and method of payment in order to qualify as exempt under the FLSA.  To read the court’s order for this case, follow the link provided.