07/12/2015 // Dallas, Texas, United States // Attorney Keith Clouse // Keith Clouse // (press release)
The United States Department of Labor recently announced that it proposes to update the regulations governing which executive, administrative, and professional employees are entitled to the Fair Labor Standards Act’s minimum wage and overtime pay protections.
Under the FLSA and corresponding rules, three tests must be met for an exemption to apply: (1) the employee must be paid a predetermined and fixed salary that is not reduced due to the quality or quantity of the employee’s work; (2) the salary paid must meet a minimum specified amount; and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties. In addition, a highly compensated employee is exempt from the overtime pay requirement if the employee is paid total annual compensation of at least $100,000 and if the employee customarily and regularly performs at least one of the duties or responsibilities of an executive, administrative, or professional employee.
Under the proposed rule:
- the standard salary level would be set at the 40th percentile of weekly earnings for full-time salaried workers ($921 per week; $47,892 annually);
- the total annual compensation requirement needed to exempt highly compensated employees would increase to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
- the salary and compensation levels would rise automatically in accordance with a set plan.
This article is presented by the Dallas employment attorneys at Clouse Dunn LLP. To speak to an employment law attorney, send an email to [email protected] or call (214) 239-2705.
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