Erin is an associate at Franczek P.C. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. Here are the highlights: 1. raises the minimum salary requirement for white-collar exempt employees to $684 a week, from a previous high of $455 a week. Bill provides management and employee training on workplace legal issues, and also conducts workplace investigations and legal audits. FOR WORKERS; FOR EMPLOYERS is a labor and employment boutique law firm representing private and public sector employers in all aspects of labor and employment law, including counseling and compliance, employment litigation, union-related matters, and employee benefits. The New York State minimum wage rates and minimum overtime-exempt salary levels for employees working outside of New York City will increase on December 31, 2020. In addition to New York’s minimum wage increase, the minimum salary that must be paid to workers classified as exempt under New York State Labor Law’s administrative and executive exemptions increased for 2020. This isn’t the first time in recent years that we’ve had a final rule issued increasing the salary threshold for the white-collar exemptions. DOL Proposes $35,308 Minimum Salary For Exempt Employees, Supreme Court Rules Auto Service Advisers Are Exempt From Overtime, Just When You Thought the DOL’s OT Rule Was Dead, It Lives to Fight Another Day, Texas District Court Strikes Down Obama FLSA Exemption Rules, DOL Brief in Overtime Rules Case Leaves New Uncertainty, DOL Broadly Defines When a Summer Camp or Program is a Child’s Place of Care for FFCRA Leave, DOL Withdraws Industry Lists from its Retail or Service Establishment Exemption Interpretative Rule, DOL Green Lights Bonuses for Employees with Fluctuating Work Schedules, Walmart Takes Lead in Providing Paid Sick Leave in the Face of COVID-19. This change does not mean that anyone making $684 per week will be exempt from overtime. While the 2016 rule was criticized by many business and employer groups, the new final rule is drawing fire from advocates for workers, who wish to force the administration to adopt something closer to the blocked 2016 rules. The New York State minimum wage rates and minimum overtime-exempt salary levels for employees working outside of New York City will increase on December 31, 2020. On December 31, 2019, the state minimum weekly salary for administrative and executive employees will range from $885.00 per week for employees outside of New York City and Nassau, Suffolk and Westchester counties, to $1,125.00 per week for employees who work in New York City for large employers and Fast Food Establishments. Talk to an Expert 937-470-5790. Each hour worked over 40 would pay an additional ½ of the “regular rate”. We would need to lower that hourly rate to an amount that, with 5 hours of overtime each week, would equal the current wage of $585 per week. She has also defended employers before the Illinois Department of Labor and the Illinois Educational Labor Relations Board. Minimum Wage (2021) In keeping with the gradual increase in the State’s minimum wage levels, the new tiered rates across the State, effective December 31, 2020, are listed below. 2. The federal increase in the white collar exemptions’ salary threshold has no effect on private sector employees in New York State, which uses tiered salary thresholds depending on where an employee works in the state. Bill also regularly counsels employers on issues relating to the Family and Medical Leave Act (FMLA), disability and accommodations. X= $12.315. For 2020, exempt employees must be paid $684 per week ($35,568 annually), consistent with federal law. Under the rule, employers may apply a limited portion of certain nondiscretionary commissions and bonuses to meet the minimum salary level for the exemptions. Top Ten Tips Disclaimer. In addition, the new minimum wage changes the 2021 thresholds … This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people. $35,356 annually $684 weekly. The employee would be entitled to 5 hours of overtime at : ($11.11*.5) times the 5 hours = $27.78. Oregon law also permits the payment on a fee basis without jeopardizing the salary basis of otherwise exempt employees, provided the fees are paid each pay period and are not less than the equivalent of the applicable state minimum wage. This latest increase will move California one step closer to its goal of a $15 per hour minimum wage. Under Colorado’s new regulations, the state minimum salary threshold for exempt employees will become $35,568, or $684.00 per week, effective July 1, 2020… The minimum salary requirement for 2020 for white-collar workers is $54,080 for employers with 25 or fewer employees and $49,920 for employers with 26 or more employees. With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, the thresholds will also rise on Jan. 1, 2021. The final rule takes effect on January 1, 2020 and raises the current minimum salary level for exempt employees from $455 per week or $23,660 annually, to $684 per week or $35,568 annually. That is up from $13.50 an hour in 2020. No changes to the duties test have been made. In 2021, exempt employees at smaller employers must be paid $827 per week ($43,004 annually) and $965 per week ($50,180 annually) at larger employers, consistent with the new MWA rules. Review your current workforce to determine which employees will be impacted by the new changes immediately, and anticipate which employees will be impacted when the escalated thresholds take effect in 2021. Minimum Salary Threshold. $585 = 40x + 7.5x Erin defends employers against discrimination cases filed in a variety of forums, including state and federal court, the Illinois Department of Human Rights, the Equal Employment Opportunity Commission and the Chicago Commission on Human Relations. The new final rule will take effect on January 1, 2020. In order for an … The Final Rule goes into effect on January 1, 2020. Bill also has extensive litigation experience, representing employers in federal and state courts and administrative agencies such as the U.S. and Illinois Departments of Labor and the Equal Employment Opportunity Commission. Then, any hours worked over 40 would require a payment of “half-time”, since the all the straight time would have already been paid. The new thresholds will be effective December 31, 2019 and will depend on employer size and location. Specifically, exempt employees must earn a fixed monthly salary of at least double the minimum wage for full-time employment. $23,660 annually $455 weekly. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. Increasing the total annual compensation threshold for highly compensated employees (“HCEs”) from $100,000 per year to $107,432 per year; Permitting employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the increase salary threshold; and. As with any business decision, all factors should be considered before making a final determination. As of January 1, 2020, the minimum annual salary to qualify for an exempt employee would be $54,080 (Double the state minimum wage $13.00/hour for employers with 26 or more employees is $26.00/hour x 40 hours/week x 52 weeks = $54,080). Non-exempt employees may be paid on a salary basis, but they are still entitled to overtime for hours over 40. The new minimum salary threshold falls between the current salary threshold and the rule proposed under the Obama administration. The FLSA's minimum salary requirement is set to remain the same in 2021. Note, however, that under Maine law, the minimum salary level for exempt employees must exceed 3000 times the applicable state minimum wage—or the rate established by the U.S. DOL, whichever is higher. Read on for everything you need to know about the new ruling! So, the regular rate may fluctuate from week to week. Note, however, that under Maine law, the minimum salary level for exempt employees must exceed 3000 times the applicable state minimum wage—or the rate established by the U.S. DOL, whichever is higher. The new regulations require that as of Jan. 1, 2020, an employee in a white collar exempt position must be paid at least $684 per week. In 2016, the DOL, under President Obama’s administration, issued a final rule increasing the salary threshold to $913 per week … $875 per week ($45,500 annually) Who Qualifies for the “White Collar” Exemptions? To re-structure the pay, the employer and employee must agree in advance on a given salary that will cover a certain number of hours. In 2016, the DOL, under President Obama’s administration, issued a final rule increasing the salary threshold to $913 per week (or $47,476 annually). This isn’t the first time in recent years that we’ve had a final rule issued increasing the salary threshold for the white-collar exemptions. On Tuesday, the U.S. Department of Labor issued its final rule concerning overtime exemptions. To be considered "exempt," these employees must generally satisfy three tests: Salary-level test. Some states have a higher salary threshold than the federal law (or have no HCE exemption or no credit for bonuses/commissions against the salary level or have more narrow duties requirements). Additional changes include: The new rule is set to take effect on January 1, 2020 and increase the number of overtime-eligible employees by 1.3 million. Erin is an associate at Franczek P.C. New York State employers, though, must be mindful that, also as of January 1, 2020, they must pay exempt employees substantially higher minimum salaries, or those employees may be eligible for overtime pay under New … $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people.⁠40. Legal challenges to the new rules are highly likely to follow. If the criteria of the New York State exception match those in the FLSA, this Department usually applies the criteria consistently with the FLSA, its regulations, and interpretations issued by the U.S. Department of Labor. For employers with 25 or fewer employees, the minimum annual salary would be $49,920. Minimum Wage (2021) In keeping with the gradual increase in the State's minimum wage levels, the new tiered rates across the State, effective December 31, 2020, are listed below. No changes to the duties test have been made. increases the current-enforced compensation level for “highly compensated employees” (HCEs) from $100,000 to $107, 432 per year. Her practice focuses on counseling and representing employers on various employment and labor issues. The minimum annual salary is $35,568.00, or $684.00 per week. *Note: The Department of Labor revised the regulations located at 29 C.F.R. Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. The minimum wage applies to most employees in Georgia, with limited exceptions including tipped employees, some student workers, and other exempt occupations.. So, exempt employees in Massachusetts will also have to be paid at the new higher salary threshold beginning January 1, 2020. This arrangement works well with fluctuating work week hours. The regular rate must be calculated weekly, using all earnings for the week divided by all hours worked that week. The minimum salary requirement for administrative, professional, and executive exemptions increased from $455 per week to $684 per week, or $35,568 per year on January 1, 2020. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. This is only one of the factors used in determining whether a worker is exempt from overtime under federal or state law. The federal increase in the white collar exemptions’ salary threshold has no effect on private sector employees in New York State, which uses tiered salary thresholds depending on where an employee works in the state. As co-chair of the firm’s Labor and Employment Practice Group, Bill is particularly versed in all aspects of state and federal law relating to minimum wages, overtime, exemptions, and wage payment issues. Employees that are classified as exempt are automatically excluded from minimum wage and overtime requirements that the FSLA provides, as well as any state … Employers … Employer Type / Exemption Type. Salary Threshold for Exempt Employees (2020) The tiered salary thresholds across the state are also rising in-line with the minimum wage. This method works best with standard workweeks. In 2014, Bill was named to the annual “40 Under 40” published by Law Bulletin Publishing which recognizes 40 attorneys under the age of 40 based on nominations by their clients, peers and the legal community. A second option is to calculate an hourly rate that will be equal to what the employee made previously as an exempt employee, but now including the overtime. Salary is only one part of the requirements for exempt status. These solutions are allowed according to the code of federal regulations. $585 = 47.5x Minimum Salary Threshold July 1, 2020 $684.00 per week ($35,568 per year) January 1, 2021 $778.85 per week ($40,500 per year) January 1, 2022 $865.38 per week ($45,000 per year) January 1, 2023 $961.54 per week ($50,000 per year) January 1, … Minimum Threshold 2020. $780 per week ($40,560 annually) October 3, 2022. Washington state and Seattle minimum wages for non-exempt employees are set to go up on January 1, 2020. According to the new exempt employee law that went into effect January 1, 2020, all executive, administrative, professional, computer, and outside sales exemptions require that the employee … This rule took effect on January 1, 2020. Likewise, the rule increases the salary level for the highly compensated employee exemption to $107,432. The minimum annual salary is $35,568.00, or $684.00 per week. With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, the thresholds will also rise on Jan. 1, 2021. There are options for reducing the impact of the new overtime rule. Salary-basis test. The new thresholds will go into effect on Jan. 1, 2021. As co-chair of the firm’s Labor and Employment Practice Group, Bill is particularly versed in all aspects of state and federal law relating to minimum wages, overtime, exemptions, and wage payment issues. Franczek P.C. Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). Almost all Oregon employers are subject to the Fair Labor Standards Act (FLSA), and the minimum salary to qualify for exemption under that law is $684 per week or $35,568 annually (allowing up to 10% of the salary basis threshold to be met with nondiscretionary bonuses/incentives, including commissions, paid at least annually). The 2016 rule also increased the minimum salary for HCEs (to $134,004), allowed employers to use nondiscretionary bonuses and incentive pay to satisfy up to 10% of the salary threshold, and provided for automatic annual updates to keep the minimum salary level adjusted to the 40th percentile of full-time salaried workers in the lowest-wage Census region. As with minimum wage, the salary thresholds vary depending on the employer’s location and the number of employees. Need Help? $684 per week ($35,568 annually)* *This is the current level required by federal law, which has been in effect since January 1, 2020. Federal / Executive, Administrative, and Professional Exemptions. The Washington State Department of Labor & Industries (L&I) has announced the state minimum wage for 2021 and calculated the new state minimum salary thresholds for overtime exempt employees. $585 = 40x +5 (1.5x) For 2021, the Washington minimum wage will be $13.69 per hour (an increase from the current $13.50 per hour). Salary threshold implementation schedule Salary thresholds for overtime exempt workers are a multiplier of state minimum wage for a 40-hour workweek 2021 Salary thresholds Small businesses: $821.40/week ($42,712.80/year) Large businesses: $958.30/week ($49,831.60/year) When the rule takes effect July 1, 2020 Jan. 1, 2021 Jan. 1, 2022 Jan. 1, 2023 Effective January 1, 2020, employers must pay employees a salary of at least $684 per week. The annual minimum compensation for “highly compensated employees” (HCEs) also increases. Bill is a partner at Franczek P.C. January 1, 2021. Large businesses (51 or more employees): An exempt employee must earn a salary of at least 1.75 times the minimum wage, or $958.30 a week ($49,831.60/year). These new minimums will take effect on January 1, 2020. Like the minimum wage, the salary levels depend on employer size and location. Committing to updating the salary threshold more regularly. Minimum wage laws can affect businesses of all sizes, whether operating … The current minimum salary was $455 per week, or $23,660 annually. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people. Job titles do not determine exempt status. Broadly speaking, the minimum salary level for white-collar employees in California is twice the state’s minimum wage for full-time employment (that is, 40 hours per week). New York City Employers (11 or more employees) / Executive and Administrative Exemptions. The FLSA and the State Minimum Wage Act exempt employees who work in a bona fide administrative capacity from the overtime pay requirements. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. More narrowly, the minimum salary level varies by business size. Likewise, the rule increases the salary level for the highly compensated employee exemption to $107,432. These numbers are calculated by doubling the applicable minimum wage, multiplying that … The current salary threshold is $3,466.67 a … Each time the New York State minimum wage increases, the state’s minimum salary required for executive and administrative employees will increase proportionately. The salary test. As of January 1, 2020, the minimum salary amount is $692.31 per week for exempting a worker from overtime and as of January 1, 2021 the amount increases to $700.97 per week. The new state minimum wage will be $13.69 an hour, and will take effect Jan. 1, 2021. Salary Test for Exempt Employees . Copyright ©2018 R.C. If an exempt employee’s salary drops below the minimum salary requirement, the employee may no longer be considered exempt. Using our $500 example, the regular rate for a 42 hour week is $11.90, but the regular rate for a 49 hour week is $10.20. Minimum Wage Increase. Frequently asked questions. Currently, the minimum salary level under Maine law is $33,000 per year (3000 x $11), or $634.62 per week. Aside from the legalities, there is the consideration of the “psychological contract” between employee and employer. 10/6/2020. Increased Salary Threshold for Overtime Exemption The new state minimum wage will be $13.69 an hour, and will take effect Jan. 1, 2021. The new minimum salary is now $684 per week, or $35,568 annually. The rule increases the salary threshold for employees exempt under the executive, administrative, and professional exemptions (the “white collar exemptions”) from $455 per week (or $23,660 annually) to $684 per week (or $35,568 annually). Salary Threshold for Exempt Employees (2021) Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020. The current minimum is $23,660.00, or $455.00 per week. OAR 839-020-0004(30)(b). One solution is to re-structure the formerly exempt employee’s pay so that the new pay with overtime approximates what he was making previously without the overtime pay. As of January 1, 2020, when the new federal rule will go into effect, the minimum … $58,500 annually $1,125 weekly. The new rule is set to take effect on January 1, 2020 and increase the number of overtime-eligible employees by 1.3 million. $58,500 annually $1,125 weekly October 3, 2020. The wage and hour team at Franczek PC created this blog to provide timely, practical insights on wage and hour law to employers. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or. To be considered "exempt," employees must generally satisfy all three of the following tests: Salary-level test: Employees must earn a weekly salary that meets the minimum requirements. There are two aspects to this review – determine whether employees currently in exempt positions meet both the new minimum salary requirement and the duties test for an overtime exemption. 5 hours times $ 18.48 = $ 92.40 ($12.315 x 1.5) Increased Federal Salary Threshold for Exempt Employees Takes Effect on January 1, 2020 On September 24, 2019, the U.S. Department of Labor issued its final rule raising the minimum salary for exempt employees under federal law from $23,660/year (or $455/week) to $35,568/year (or $684/week), effective January 1, 2020. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. The duties tests remain intact. This number was based on the 20 th percentile of weekly earnings for full-time salaried workers in the lowest income census region (currently the South). We will keep you updated on any new developments as the effective date of the new rule approaches. Georgia's state minimum wage rate is $7.25 per hour.This is the same as the current Federal Minimum Wage rate. 40 hours times $12.315 = $492.60 A thorough review of the employee handbook and a consultation with the employer’s attorney is recommended before implementing any changes to pay. However, if there is any sort of contract, whether written or implied, with the employee regarding his compensation, then the employer’s ability to change the compensation may be limited. The Georgia minimum wage was last changed in 2008, when it was raised $0.70 from $6.55 to $7.25. That is up from $13.50 an hour in 2020. Conduct an audit. Her labor experience includes preparing and representing clients during arbitration and unfair labor practice charge hearings, while her employment practice includes counseling employers on federal, state, and local paid and unpaid sick leave laws, as well as training employees on topics such as developing a respectful workplace. Seyfarth Synopsis: As they have each year since 2016, the minimum wage and exempt salary threshold will increase for New York employers effective December 31, 2020. The United States Department of Labor issued a final regulation to take effect January 1, 2020, raising the minimum overtime salary threshold for exempt employees under federal law to $35,568. Although the overtime solutions presented here are legal, they may be perceived as unfair by employees who are expecting to earn more money when the new law is passed. The table below outlines New York’s 2020 minimum wage: The minimum wage is expected to increase annually until it reaches $15.00 per hour by the end of 2021 for all of New York State. Salary Threshold for Exempt Employees (2021) Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020. So, if the employee worked 45 hours in a week, the overtime calculation would be: $500 divided by 45 hours= $11.11 for the regular rate. To use this method we need a bit of algebra. Here are the highlights: 1. That amount plus the regular salary of $500 would amount to $527.78. Bill is a partner at Franczek P.C. Minimum Salary/Fee Rate (More than 50 Washington Employees) Minimum Salary/Fee Rate (50 or Fewer Washington Employees) July 1, 2020. Bill also regularly counsels…. The new rules start with setting the salary threshold at 1.25 times the state’s hourly minimum wage. 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