Gibbons Law Alert

Gibbons Law Alert

Tagged: Non-Exempt

DOL Issues Final Rule Increasing Salary Thresholds for Exempt Employees Under FLSA

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Posted in Wage and Hour

On July 10, 2024

On April 23, 2024, the United States Department of Labor (DOL) released a final rule that increased the salary thresholds for the executive, administrative, professional, and highly compensated employees exemptions under the Fair Labor Standards Act (FLSA). The final rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees,” went into effect on July 1, 2024. The FLSA requires covered employers to pay employees a minimum wage and, for employees who work more than 40 hours in a week, overtime pay (at 1.5 times an employee’s regular rate).  However, the minimum wage and overtime requirements do not apply to employees who meet the requirements of the executive, administrative, or professional exemptions. One of the requirements of these exemptions is a minimum weekly salary. The final rule raised the minimum weekly salary to qualify for the exemption from $684 per week ($35,568 per year) to $844 per week ($43,888 per year) and, effective January 1, 2025, to $1,128 per week ($58,656 per year). Additionally, the final rule raised the annual salary threshold for the exemption for highly compensated employees from $107,432 per year to $132,964 per year and, effective January 1, 2025, to $151,164 per year.  The highly compensated employee exemption applies to certain highly compensated employees and combines an annual...

United States DOL Proposed Update to FLSA Overtime Rules

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Posted in Wage and Hour

On March 20, 2019

On March 7, 2019, The United States Department of Labor (DOL), announced a proposal to update the overtime rules under the Fair Labor Standards Act (FLSA). Under the FLSA, employers are required to pay employees at least the minimum wage for all hours worked, and overtime pay (at 1 ½ times an employee’s regular rate) for all hours worked in excess of 40 in a workweek. To be exempt from these requirements, an employee must be paid on a salary basis, at or above a set minimum weekly salary level, and meet certain specific requirements concerning their job duties. In March 2014, President Obama directed the DOL to update and modernize regulations under the FLSA governing overtime exemptions for “white collar” employees (i.e., executive, administrative and professional employees). After receiving more than 270,000 comments, in May 2016, the DOL issued a final rule, substantially increasing the minimum salary levels for the overtime-exempt classifications, from $455 per week ($23,660 per year) to $913 per week ($47,476 per year), and incorporating mechanisms to adjust the salary level in the future (“2016 Rule”). Under the 2016 Rule, the salary level needed to satisfy the highly compensated employee (HCE) exemption (which includes a less stringent “duties” test), was set at $134,004 (increased from the $100,000 threshold in effect since...

NYS Department of Labor Proposed Overtime Rule

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Posted in Wage and Hour

On December 22, 2016

With the final overtime rule for the “white collar” exempt employee minimum salary level issued by the United States Department of Labor (the “DOL”) on hold, the New York State Department of Labor’s proposed overtime rules may take precedence for New York employers. As we previously communicated, the DOL’s new overtime rule – which substantially increases the minimum salary that employers must pay to certain classes of employees to avoid the overtime pay requirements of the federal Fair Labor Standards Act (“the FLSA”) – was scheduled to take effect December 1, 2016, but was placed on hold by a preliminary injunction issued by a Texas federal district court. New York State has now taken matters into its own hands independent of the now-suspended federal rule change.

Department of Labor Final Overtime Rule

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Posted in Wage and Hour

On May 23, 2016

The United States Department of Labor (“the DOL”) has finally issued the long-awaited rules dramatically increasing the minimum salary level for the overtime-exempt classifications under the Fair Labor Standards Act (“the FLSA”). The new rules also incorporate mechanisms to adjust this salary level in the future. The effect of future adjustments will require an employer to pay wage increases unrelated to the employer’s financial condition or employee performance. The new rules will have the greatest impact on those employees currently classified as exempt but who will not meet the new minimum salary threshold. These rules go into effect December 1, 2016, a date later than DOL originally communicated, which gives employers an opportunity to conduct a self-analysis to prepare for these changes.

Supreme Court Upholds Department of Labor’s Authority to Issue Interpretive Rules Without Public Notice or Comment

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Posted in Wage and Hour

On March 25, 2015

Rules promulgated by agencies of the federal government can be divided into those which have the force and effect of law and those which are merely “interpretative” or provide general statements of policy concerning the agency’s view of the law. When an agency wishes to promulgate rules having the force and effect of law it must comply with the requirements of the Administrative Procedures Act (APA) by, among other things, publishing the proposed rules in advance, allowing sufficient time for public comment and responding to significant comments received. In Perez v. Mortgage Bankers Association, the United States Supreme Court addressed the issue of whether the Department of Labor (the “DOL”) was free to reverse itself about the proper interpretation of the laws over which it has enforcement responsibility without giving notice or allowing public comment of the proposed change. The Court unanimously held that the DOL was free to do so.

Supreme Court Decides Time Spent to Undergo Security Screening is Noncompensable

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Posted in Wage and Hour

On December 15, 2014

The time warehouse workers spent waiting to undergo and undergoing antitheft security screenings before leaving work is not compensable under the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 201 et. seq., as amended by the Portal-to-Portal Act of 1947, §251 et. seq. (Portal-to-Portal Act), according to the United States Supreme Court, which unanimously decided Integrity Staffing Solutions, Inc. v. Busk on December 9, 2014.

Changes to FLSA Overtime Exemption for Domestic Service Workers are Coming

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Posted in Labor / Wage and Hour

On August 22, 2014

Effective January 1, 2015, the Fair Labor Standards Act overtime exemption for “domestic service workers” will change, having significant ramifications for employers of these employees. Until this change, domestic service workers generally have been exempt from overtime compensation, which means they need not be paid at the rate of time and a half for hours worked in excess of 40 per workweek. The U.S. Department of Labor has issued a Fact Sheet to summarize the changes.

Eleventh Circuit Becomes Latest Court of Appeals to Enforce Agreement to Arbitrate FLSA Collective Action

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Posted in Wage and Hour

On April 1, 2014

On March 21, 2014, the United States Court of Appeals for the Eleventh Circuit joined a growing number of federal Courts of Appeals to reject arguments that class waivers contained in arbitration agreements should not be enforced in the employment context. In Walthour v. Chipio Windshield Repair LLC, the Eleventh Circuit (which covers Georgia, Florida, and Alabama) upheld a broad arbitration provision which required employees to bring all employment claims in their “individual capacity and not as a plaintiff of class member in a purported class or representative proceeding ….”

Minimum Wage Increased in New York and New Jersey; Salary Basis Requirements Increased in New York

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Posted in Wage and Hour

On January 10, 2014

All employers operating in either New York or New Jersey should take note that — effective immediately — the minimum hourly wage for non-exempt employees has increased. In New York, the minimum wage is now $8.00 per hour. In New Jersey, the minimum wage is now $8.25 per hour. In these states, employers must pay at least the new minimum hourly wage to non-exempt employees for each hour worked. Other than raising the hourly minimum wage, the changes do not alter the way that overtime is calculated.

U.S. Supreme Court Rules Against OT Pay for Pharmaceutical Salespeople

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Posted in Wage and Hour

On June 25, 2012

In a major victory for pharmaceutical companies, the U.S. Supreme Court recently held that company sales representatives who promote their employer’s products to doctors and hospitals are exempt from the overtime requirements of the Fair Labor Standards Act (“FLSA”). In doing so, the Court resolved a split in the Circuit Courts of Appeal over the scope of the “outside salesman” exemption to the FLSA’s overtime pay requirements. The Court’s holding in Christopher v. SmithKline Beecham Corp. regarding the scope of this exemption has provided much needed clarity to pharmaceutical companies and employers with similar types of sales forces who have relied – and hope to continue to rely – on the exemption.

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