Labor & Employment Alert | May 2016 While the doubling of the salary threshold to satisfy the white collar exemptions is not good news for the employer community, it could have been much worse. In its proposed regulations, the DOL suggested increasing the salary threshold to more than $50,000, having yearly automatic increases and changing the duties tests to make it more difficult to for employers to classify employees as exempt from overtime even if they are paid well over $50,000. In response to these proposals, the employer community warned the DOL that there would be a drastic negative impact on the economy if these proposals went forward. It seems that the DOL, at least in part, listened to the issues raised by employers in response to their initial proposals. As a result of these amendments, employers must reassess the status of their lower-level exempt staff.

If exempt employees currently earn less than $913.00 per week and the employer wants to maintain the employee as exempt, assuming the duties tests are satisfied, the employer must raise the employee’s salary to at least $913.00 per week or raise the employee’s salary to $821.17 per week and pay a nondiscretionary bonus or incentive compensation at least quarterly in an amount that averages out to $91.30 per week. The other option is for employees to reclassify such employees as nonexempt and entitled to overtime. Whatever option the employer selects, it is important for the employer to work closely with counsel to ensure that the ramifications of their decision is well understood and properly implemented. For more information about this alert, please contact Carolyn D.

Richmond at crichmond@foxrothschild.com or 212.878.7983, Glenn S. Grindlinger at ggrindlinger@ foxrothschild.com or 212.905.2305 or any member of the firm’s Labor & Employment Department. Attorney Advertisement © 2016 Fox Rothschild LLP. All rights reserved.

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