The current rule has been in effect since 2004 and requires virtually all employers to pay most employees at least the federal minimum wage for each hour worked and overtime pay for all hours worked in excess of the standard 40 hours in a work week. There are exemptions from overtime and minimum wage requirements for certain “exempt” administrative, professional and executive employees. Employees must satisfy specific salary and duties to be classified as “exempt”:
- Meet the minimum salary requirement of $455 per week;
- With limited exceptions, the employer must pay the employee their full salary in any week they perform work, regardless of the quality or quantity of the work; and
- The employee’s primary duties must meet certain criteria.
In 2016, the DOL implemented a final rule to increase the salary basis to $913 per week ($47,476 annually). The final rule was blocked by a federal court on the eve of the effective date.
The 2019 rule focuses on changing the minimum salary requirements and does not make any changes to the job duties test, which most experts believe is a critical component of the rule. The 2019 rule also includes a DOL commitment to periodically review the salary threshold for updates in the future. This review differs significantly from the 2016 rule which provided for automatic updates to the salary threshold.
The proposed rule is subject to a 60 day public comment period. After the comment period is completed, a final rule and effective date will be issued by the DOL. If you are interested to submit comments about the proposed rule, you may do so electronically at www.regulations.gov, in the rulemaking docket RIN 1235-AA20.