Reclassifying Exempt Employees for 2016

It is expected that the new DOL regulations increasing the minimum weekly salary for exempt administrative and executive employees will go into effect in January 2016. The proposed regulations will require employers to pay at least $970.00 per week to meet the salary basis test for the exemption (the duties test will also have to be satisfied).

In anticipation of the change, employers should evaluate all exempt positions with salaries below $970.00 per week and begin to consider which positions justify a raise in pay to maintain the exemption. For those positions that will become non-exempt, employers should consider: (i) whether to switch the employees to an hourly wage as opposed to continuing to pay the non-exempt employees a salary (which will correlate to a regular rate of pay based on hours worked); (ii) if non-exempt employees are going to be paid a salary, adopting a time keeping system to track hours worked; (iii) what kind of incentives or programs, if any, are needed to retain management employees who become non-exempt; and (iv) adopting a policy (if one is not in place) that prohibits non-exempt employees from working overtime without advance permission and includes disciplinary consequences for working unauthorized overtime.

The current deadline to comment on the new regulations is September 4, 2015. We will continue to update the blog on developments.

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