{"id":14552,"date":"2023-09-05T09:41:42","date_gmt":"2023-09-05T13:41:42","guid":{"rendered":"https:\/\/gtm.com\/business\/?p=14552"},"modified":"2023-10-23T14:55:09","modified_gmt":"2023-10-23T18:55:09","slug":"proposed-rule-exempt-minimum-salaries","status":"publish","type":"post","link":"https:\/\/gtm.com\/business\/proposed-rule-exempt-minimum-salaries\/","title":{"rendered":"What is the New Proposed Rule on Exempt Minimum Salaries?"},"content":{"rendered":"

\"proposedThe federal Department of Labor (DOL) has finally announced the release of its proposed rule<\/a> to increase the minimum salaries required for certain employees to be classified as exempt from minimum wage and overtime. While proposed rules have a tendency to change \u2013 and often the effective date is distant and unknown \u2013 we wanted to provide some information given the potential significance of this rule.<\/p>\n

Currently, executive<\/em>, administrative<\/em>, and professional<\/em> employees must be paid at least $684 per week ($35,568 per year) to be properly classified as exempt. This grouping of exemptions is often referred to collectively as \u201cEAP.\u201d The proposed rule, if adopted as-is, would increase the salary threshold to require that EAP employees be paid at least $1,059 per week<\/strong> ($55,068 per year) to be classified as exempt.<\/p>\n

Currently, employees who are exempt under the highly compensated employee<\/em> (HCE) exemption, which has its own specific criteria, must be paid at least $107,432 per year. The proposed rule, if adopted as-is, would increase this amount to require that HCE employees be paid at least $143,988 per year <\/strong>to be classified as exempt.<\/p>\n

Finally, the proposed rule, if adopted in its current form, would implement automatic updates to the EAP salary level and HCE total annual compensation requirement every three years.<\/p>\n

Learn more about the rules for these exemptions<\/a>, including what duties employees must perform to qualify.<\/p>\n

Proposed Rule Timing<\/h2>\n

The proposed rule will likely be published soon and then there will be a 60-day comment period. During that time, the DOL will accept comments (read: suggestions, complaints, arguments) from anyone who would like to submit them.<\/p>\n

Once the comment period is closed, the DOL will review the feedback and potentially make changes before publishing the final rule. We don\u2019t know how long that review and revision process will take, though it will likely be at least a few months. The DOL has suggested that these changes could take effect as soon as 60 days after the publication of the final rule.<\/p>\n

It\u2019s worth noting that the last time the DOL attempted a drastic change to the salary minimums, the rule was thrown out in litigation just weeks before taking effect. We have no way of predicting if that will happen again, but it is<\/em> likely that the rule change will be litigated.<\/p>\n

Proposed Rule Impacts<\/h2>\n

While it may be a bit early to start thinking about the impacts of this rule change, employers that want to maximize planning time should consider the following:<\/p>\n