• DOL Mandates 100% Increase in Minimum Salary to Satisfy Fair Labor Standards Act White Collar Overtime Exemptions
  • June 16, 2016 | Authors: Fred W. Alvarez; Craig S. Friedman; Michael J. Gray; Brian M. Jorgensen; Teresa R. Rodela
  • Law Firms: Jones Day - Palo Alto Office ; Jones Day - Atlanta Office ; Jones Day - Chicago Office ; Jones Day - Dallas Office
  • On May 18, 2016, the U.S. Department of Labor ("DOL") issued its final rule updating and revising the overtime exemptions for executive, administrative, and professional employees under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. (the "Final Rule"). Effective December 1, 2016, the Final Rule more than doubles—from $23,660 to $47,476 on an annual basis—the minimum salary to satisfy these exemptions. As a result, employers must immediately examine their currently exempt workforce and, with potential business impacts in mind, make careful determinations about those who fall below the increased salary threshold. Employers must consider, for example, whether to raise their salaries to meet the threshold or reclassify them to non-exempt. If reclassified, employers must decide whether to reduce their hours worked to avoid paying overtime, whether to reallocate hours worked among existing employees, and how reclassified employees should record their time worked, among a host of other considerations.