August 31, 2017, Federal Judge Amos Mazzant struck down the Obama administration's 2016 rule that more than doubled—from $23,660 to $47,476—the minimum annual salary required to qualify for the Fair Labor Standards Act's "white collar" exemptions. Last November, the same court blocked the overtime rule, but had not yet declared it invalid.
Employers don't have to make any changes. The order is a final ruling.
However, employers should prepare for an eventual increase to the exempt salary threshold, even though it isn't clear what the final number will be. The rumors are in the $30Ks somewhere.
That means the existing overtime regulations apply for now, which is as follows:
To be considered “exempt,” employees must meet three (3) requirements:
1. Minimum Salary Threshold
- $455 per week or $23,660 per year.
- Base salary must meet minimum threshold. (i.e., does not include Bonuses or Commissions).
- Highly Compensated Employee (HCE) Salary Threshold: $100,000 per year.
2. Paid on Salary Basis
- Cannot reduce pre-determined pay amount based on quality of work or quantity of work (number of hours worked).
- Full salary due, if any work (no matter how few hours) is performed in the workweek.
3. Duties Tests
- Primary duty is management of the business.
- Directs work of two (2) or more employees.
- Authority to hire/fire/make recommendations.
- Primary duty is office/non-manual work.
- Directly related to management or general business operations.
- Exercises discretion and uses own judgement.
- NOTE: A “clerical” position where the employee is given specific orders or lists of work to carry out, does not qualify as Administrative.
- Learned: Advanced knowledge, education required
- Creative: Artistic, imaginative
- Primary duty is making sales, obtaining orders/contracts for services.
- Employed away from the employer’s place of business.
- Computer and related work