March 14, 2019
Authored by: Bryan Cave and Anthony George
The United States Department of Labor has issued a notice of proposed rulemaking that would change the minimum salary levels necessary for an employee to be properly classified as exempt from the overtime compensation requirements of the Fair Labor Standards Act. Under the proposed rule, the minimum salary for most exemptions would rise from $455 per week ($23,660 annualized) to $679 per week ($35,308 annualized). The minimum annual compensation for the “highly compensated employee” exemption would rise from $100,000 to $147,414.
For employees in the executive, administrative and professional exemptions, the proposed rule would permit nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to ten percent (10%) of the required minimum salary. In addition, provided that the employee has received at least ninety percent (90%) of the required minimum compensation in each payroll week for 52 weeks, the employer would be permitted to make a single “catch-up” payment