The U.S. Department of Labor (“DOL”) just announced a new minimum salary requirement for exempt employees.  Effective January 1, 2020, all exempt employees must be paid a minimum salary of $684 per week (equivalent to $35,568 per year).  The current minimum of $455 per week ($23,660 per year) was set in 2004.

The new regulations also raise the minimum compensation level to qualify for the “highly compensated employee” exemption to $107,432 per year, up from $100,000. 

If you have salaried employees affected by this change, you can either increase their pay to at least $35,568 per year ($107,432 for highly compensated employees) or switch them to overtime-eligible status and pay them overtime for any hours worked over 40 per week. 

The salary levels will not increase automatically.  Instead, the DOL stated that it intends to update these levels approximately every four years moving forward.

DOL opted not to update or alter any other element of the various tests for whether an employee is exempt or not. 

As always, feel free to contact us at any time if you have questions about any new law and how it affects your business.