Tax and HR Alerts

The Department of Labor has released a new proposed rule to increase the minimum salary that an employee must earn to be exempt from minimum wage and overtime under a white collar exemption.

The Rule
The proposed rule requires that salaried exempt executive, professional, administrative, and computer employees must be paid at least $679 per week on a salary basis, an increase from the current minimum of $455 per week. The rule allows for non-discretionary bonuses and incentive payments to account for up to 10% of the minimum, so long as they are paid out on at least an annual basis; currently commissions and bonuses cannot be counted toward the minimum.

The DOL also proposes that highly compensated employees must be paid at least $147,414 per year to qualify as exempt. Of that amount, at least $679 per week must be paid on a salary or fee basis.

The anticipated effective date of this rule is January 2020.