This long-anticipated Final Rule comes in response to President Obama's Presidential Memorandum on March 13, 2014, directing the DOL to modernize the regulations that define "white collar" workers for purposes of exemption from the FLSA's minimum wage and overtime requirements. Following the release of the proposed regulations and comment period and the Office of Information and Regulatory Affairs' (OIRA) review of the proposed rule, the Final Rule has been released today, May 18, 2016.
The significant changes to the current white collar exemptions are: (1) an increase in the salary level test from $23,660 to $47,476 annually (from $455 per week to $913 per week); (2) an increase in the salary level test for highly compensated employees from $100,000 to $134,004 annually; (3) automatic increases in the salary level test every three years beginning January 1, 2020; and (4) the allowance of nondiscretionary bonuses, commissions and other incentive payments (not including discretionary bonuses) paid at least quarterly to count towards a maximum of ten percent of the standard weekly salary level test. Significantly, the duties test has not changed with the issuance of the Final Rule.
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