raises the minimum salary requirement for white-collar exempt employees to $684 a week, from a previous high of $455 a week. This arrangement works well with fluctuating work week hours. As of January 1, 2020, the minimum salary amount is $692.31 per week for exempting a worker from overtime and as of January 1, 2021 the amount increases to $700.97 per week. Franczek P.C. Oregon law also permits the payment on a fee basis without jeopardizing the salary basis of otherwise exempt employees, provided the fees are paid each pay period and are not less than the equivalent of the applicable state minimum wage. Then, any hours worked over 40 would require a payment of “half-time”, since the all the straight time would have already been paid. In addition, the new minimum wage changes the 2021 thresholds … Minimum Wage (2021) In keeping with the gradual increase in the State's minimum wage levels, the new tiered rates across the State, effective December 31, 2020, are listed below. The Georgia minimum wage was last changed in 2008, when it was raised $0.70 from $6.55 to $7.25. The new state minimum wage will be $13.69 an hour, and will take effect Jan. 1, 2021. The federal increase in the white collar exemptions’ salary threshold has no effect on private sector employees in New York State, which uses tiered salary thresholds depending on where an employee works in the state. To be considered "exempt," employees must generally satisfy all three of the following tests: Salary-level test: Employees must earn a weekly salary that meets the minimum requirements. In 2016, the DOL, under President Obama’s administration, issued a final rule increasing the salary threshold to $913 per week … If the criteria of the New York State exception match those in the FLSA, this Department usually applies the criteria consistently with the FLSA, its regulations, and interpretations issued by the U.S. Department of Labor. The law introduced minimum wages and overtime pay, and created criteria for determining whether an employee is “exempt” from overtime pay requirements or is “non-exempt” and therefore entitled to overtime pay. Effective January 1, 2020, however, the minimum salary level to be exempt will increase to $684 per week ($35,568 per year). The new salary level is equivalent to $35,568 per year for a full-time worker. For 2021, the Washington minimum wage will be $13.69 per hour (an increase from the current $13.50 per hour). $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people.⁠40. The minimum salary requirement for 2020 for white-collar workers is $54,080 for employers with 25 or fewer employees and $49,920 for employers with 26 or more employees. As co-chair of the firm’s Labor and Employment Practice Group, Bill is particularly versed in all aspects of state and federal law relating to minimum wages, overtime, exemptions, and wage payment issues. Erin is an associate at Franczek P.C. Starting in 2023, the salary threshold will adjust (i.e., increase) automatically to an amount equal to the 10th percentile of all Pennsylvania workers who work in salaried exempt positions. Washington labor costs are about to increase for Washington employers with minimum wage employees and, more significantly, for exempt employees currently in the salary range of $35,000 to $40,000 annually. For employers with 25 or fewer employees, the minimum annual salary would be $49,920. The new state minimum wage will be $13.69 an hour, and will take effect Jan. 1, 2021. October 3, 2020. Aside from the legalities, there is the consideration of the “psychological contract” between employee and employer. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people. Some states have a higher salary threshold than the federal law (or have no HCE exemption or no credit for bonuses/commissions against the salary level or have more narrow duties requirements). The current minimum salary was $455 per week, or $23,660 annually. For 2020, exempt employees must be paid $684 per week ($35,568 annually), consistent with federal law. Likewise, the rule increases the salary level for the highly compensated employee exemption to $107,432. The new regulations require that as of Jan. 1, 2020, an employee in a white collar exempt position must be paid at least $684 per week. Salary is only one part of the requirements for exempt status. The final rule takes effect on January 1, 2020 and raises the current minimum salary level for exempt employees from $455 per week or $23,660 annually, to $684 per week or $35,568 annually. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. These numbers are calculated by doubling the applicable minimum wage, multiplying that … Here are the highlights: 1. No changes to the duties test have been made. Rulka Human Resources Consulting, All Rights Reserved, New Minimum Salary for Exempt Employees as of 1/1/2020: How to Minimize the Impact, Employment Law for Managers and Supervisors. This change does not mean that anyone making $684 per week will be exempt from overtime. Bill provides management and employee training on workplace legal issues, and also conducts workplace investigations and legal audits. Almost all Oregon employers are subject to the Fair Labor Standards Act (FLSA), and the minimum salary to qualify for exemption under that law is $684 per week or $35,568 annually (allowing up to 10% of the salary basis threshold to be met with nondiscretionary bonuses/incentives, including commissions, paid at least annually). In 2021, exempt employees at smaller employers must be paid $827 per week ($43,004 annually) and $965 per week ($50,180 annually) at larger employers, consistent with the new MWA rules. OAR 839-020-0004(30)(b). $780 per week ($40,560 annually) October 3, 2022. The new thresholds will be effective December 31, 2019 and will depend on employer size and location. Minimum Wage Increase. Salary Threshold for Exempt Employees (2021) Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020. Increased Salary Threshold for Overtime Exemption is a labor and employment boutique law firm representing private and public sector employers in all aspects of labor and employment law, including counseling and compliance, employment litigation, union-related matters, and employee benefits. The Final Rule goes into effect on January 1, 2020. The annual minimum compensation for “highly compensated employees” (HCEs) also increases. No changes to the duties test have been made. A thorough review of the employee handbook and a consultation with the employer’s attorney is recommended before implementing any changes to pay. On January 1, 2020, California’s statewide minimum wage will increase to $13 per hour for employers with 26 or more employees and $12 per hour for employers with 25 or fewer employees. The salary test. In 2014, Bill was named to the annual “40 Under 40” published by Law Bulletin Publishing which recognizes 40 attorneys under the age of 40 based on nominations by their clients, peers and the legal community. Minimum Wage (2021) In keeping with the gradual increase in the State’s minimum wage levels, the new tiered rates across the State, effective December 31, 2020, are listed below. Note, however, that under Maine law, the minimum salary level for exempt employees must exceed 3000 times the applicable state minimum wage—or the rate established by the U.S. DOL, whichever is higher. These employees are known as "exempt" employees. Conduct an audit. There are two aspects to this review – determine whether employees currently in exempt positions meet both the new minimum salary requirement and the duties test for an overtime exemption. The current minimum is $23,660.00, or $455.00 per week. FOR WORKERS; FOR EMPLOYERS To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684* per week. To use this method we need a bit of algebra. The employee expects fair and ethical treatment by the employer in return for his work. Bill also has extensive litigation experience, representing employers in federal and state courts and administrative agencies such as the U.S. and Illinois Departments of Labor and the Equal Employment Opportunity Commission. The minimum annual salary is $35,568.00, or $684.00 per week. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or. Employer Type / Exemption Type. The new minimum salary is now $684 per week, or $35,568 annually. If an exempt employee’s salary drops below the minimum salary requirement, the employee may no longer be considered exempt. According to the new exempt employee law that went into effect January 1, 2020, all executive, administrative, professional, computer, and outside sales exemptions require that the employee … Bill is a partner at Franczek P.C. The federal increase in the white collar exemptions’ salary threshold has no effect on private sector employees in New York State, which uses tiered salary thresholds depending on where an employee works in the state. That is up from $13.50 an hour in 2020. Using our $500 example, the regular rate for a 42 hour week is $11.90, but the regular rate for a 49 hour week is $10.20. Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level. Effective January 1, 2020, however, the minimum salary level to be exempt will increase to $684 per week ($35,568 per year). $684 per week ($35,568 annually)* *This is the current level required by federal law, which has been in effect since January 1, 2020. For example, if the usual schedule is 45 to 50 hours per week, the agreement may be that $500 will cover all the straight time up to 50 hours per week. The regular rate must be calculated weekly, using all earnings for the week divided by all hours worked that week. Seyfarth Synopsis: As they have each year since 2016, the minimum wage and exempt salary threshold will increase for New York employers effective December 31, 2020.. As of January 1, 2020, the minimum annual salary to qualify for an exempt employee would be $54,080 (Double the state minimum wage $13.00/hour for employers with 26 or more employees is $26.00/hour x 40 hours/week x 52 weeks = $54,080). Her labor experience includes preparing and representing clients during arbitration and unfair labor practice charge hearings, while her employment practice includes counseling…. Increased Federal Salary Threshold for Exempt Employees Takes Effect on January 1, 2020 On September 24, 2019, the U.S. Department of Labor issued its final rule raising the minimum salary for exempt employees under federal law from $23,660/year (or $455/week) to $35,568/year (or $684/week), effective January 1, 2020. $35,356 annually $684 weekly. The new rules start with setting the salary threshold at 1.25 times the state’s hourly minimum wage. These new minimums will take effect on January 1, 2020. Her practice focuses on counseling and representing employers on various employment and labor issues. Talk to an Expert 937-470-5790. Likewise, the rule increases the salary level for the highly compensated employee exemption to $107,432. Read on for everything you need to know about the new ruling! To re-structure the pay, the employer and employee must agree in advance on a given salary that will cover a certain number of hours. Currently, the minimum salary level under Maine law is $33,000 per year (3000 x $11), or $634.62 per week. On December 31, 2019, the state minimum weekly salary for administrative and executive employees will range from $885.00 per week for employees outside of New York City and Nassau, Suffolk and Westchester counties, to $1,125.00 per week for employees who work in New York City for large employers and Fast Food Establishments. Although the overtime solutions presented here are legal, they may be perceived as unfair by employees who are expecting to earn more money when the new law is passed. Broadly speaking, the minimum salary level for white-collar employees in California is twice the state’s minimum wage for full-time employment (that is, 40 hours per week). With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, the thresholds will also rise on Jan. 1, 2021. Salary-basis test. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. The minimum wage applies to most employees in Georgia, with limited exceptions including tipped employees, some student workers, and other exempt occupations.. 5 hours times $ 18.48 = $ 92.40 ($12.315 x 1.5) The new thresholds will go into effect on Jan. 1, 2021. In order for an … 10/6/2020. Salary Threshold for Exempt Employees (2021) Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020. As an example, if an employee makes a current salary of $585 per week and regularly works 45 hours per week, then he has a regular rate of $13 per hour. Business groups and several states filed a lawsuit seeking to block the 2016 rules, arguing that the DOL exceeded its authority in adopting the rules. Top Ten Tips Disclaimer. The new minimum salary threshold falls between the current salary threshold and the rule proposed under the Obama administration. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. Her practice focuses on counseling and representing employers on various employment and labor issues. Need Help? October 3, 2021. Salary Test for Exempt Employees . This isn’t the first time in recent years that we’ve had a final rule issued increasing the salary threshold for the white-collar exemptions. A federal district court in Texas agreed and blocked the rules from taking effect. So, if the employee worked 45 hours in a week, the overtime calculation would be: $500 divided by 45 hours= $11.11 for the regular rate. 2. This method works best with standard workweeks. New York City Employers (11 or more employees) / Executive and Administrative Exemptions. More narrowly, the minimum salary level varies by business size. Large businesses (51 or more employees): An exempt employee must earn a salary of at least 1.75 times the minimum wage, or $958.30 a week ($49,831.60/year). Committing to updating the salary threshold more regularly. Legal challenges to the new rules are highly likely to follow. $875 per week ($45,500 annually) Who Qualifies for the “White Collar” Exemptions? Minimum Threshold 2019. Georgia's state minimum wage rate is $7.25 per hour.This is the same as the current Federal Minimum Wage rate. She has also defended employers before the Illinois Department of Labor and the Illinois Educational Labor Relations Board. *Note: The Department of Labor revised the regulations located at 29 C.F.R. DOL Proposes $35,308 Minimum Salary For Exempt Employees, Supreme Court Rules Auto Service Advisers Are Exempt From Overtime, Just When You Thought the DOL’s OT Rule Was Dead, It Lives to Fight Another Day, Texas District Court Strikes Down Obama FLSA Exemption Rules, DOL Brief in Overtime Rules Case Leaves New Uncertainty, DOL Broadly Defines When a Summer Camp or Program is a Child’s Place of Care for FFCRA Leave, DOL Withdraws Industry Lists from its Retail or Service Establishment Exemption Interpretative Rule, DOL Green Lights Bonuses for Employees with Fluctuating Work Schedules, Walmart Takes Lead in Providing Paid Sick Leave in the Face of COVID-19. Effective Jan. 1, 2020, the thresholds are: $54,080/year for employers with 26 or more employees. The 2016 rule also increased the minimum salary for HCEs (to $134,004), allowed employers to use nondiscretionary bonuses and incentive pay to satisfy up to 10% of the salary threshold, and provided for automatic annual updates to keep the minimum salary level adjusted to the 40th percentile of full-time salaried workers in the lowest-wage Census region. The new rule is set to take effect on January 1, 2020 and increase the number of overtime-eligible employees by 1.3 million. Employees that are classified as exempt are automatically excluded from minimum wage and overtime requirements that the FSLA provides, as well as any state … The table below outlines New York’s 2020 minimum wage: The minimum wage is expected to increase annually until it reaches $15.00 per hour by the end of 2021 for all of New York State. Under the rule, employers may apply a limited portion of certain nondiscretionary commissions and bonuses to meet the minimum salary level for the exemptions. Review your current workforce to determine which employees will be impacted by the new changes immediately, and anticipate which employees will be impacted when the escalated thresholds take effect in 2021. $23,660 annually $455 weekly. That amount plus the regular salary of $500 would amount to $527.78. So, exempt employees in Massachusetts will also have to be paid at the new higher salary threshold beginning January 1, 2020. Just because an employer pays a salary that satisfies the new federal threshold does not mean that the employee is exempt under the minimum wage law of a state where the employee works. X= $12.315. As with minimum wage, the salary thresholds vary depending on the employer’s location and the number of employees. The New York State minimum wage rates and minimum overtime-exempt salary levels for employees working outside of New York City will increase on December 31, 2020. Increasing the total annual compensation threshold for highly compensated employees (“HCEs”) from $100,000 per year to $107,432 per year; Permitting employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the increase salary threshold; and. Seyfarth Synopsis: As they have each year since 2016, the minimum wage and exempt salary threshold will increase for New York employers effective December 31, 2020. Total of $492.60 plus $18.48 = $585.00. The Final Rule goes into effect on January 1, 2020. This latest increase will move California one step closer to its goal of a $15 per hour minimum wage. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. Non-exempt employees may be paid on a salary basis, but they are still entitled to overtime for hours over 40. As co-chair of the firm’s Labor and Employment Practice Group, Bill is particularly versed in all aspects of state and federal law relating to minimum wages, overtime, exemptions, and wage payment issues. increases the current-enforced compensation level for “highly compensated employees” (HCEs) from $100,000 to $107, 432 per year. To be considered "exempt," these employees must generally satisfy three tests: Salary-level test. So, exempt employees in Massachusetts will also have to be paid at the new higher salary threshold beginning January 1, 2020. That is up from $13.50 an hour in 2020. Salary threshold implementation schedule Salary thresholds for overtime exempt workers are a multiplier of state minimum wage for a 40-hour workweek 2021 Salary thresholds Small businesses: $821.40/week ($42,712.80/year) Large businesses: $958.30/week ($49,831.60/year) When the rule takes effect July 1, 2020 Jan. 1, 2021 Jan. 1, 2022 Jan. 1, 2023 Exempt Executive, Administrative, Professional and Computer Employees (EAP) Under this rule, employers must pay salaried exempt EAP employees at least $684 per week on a salary basis. For example: the minimum wage in 2020 will be $13.50, or $540 per week for a … Each time the New York State minimum wage increases, the state’s minimum salary required for executive and administrative employees will increase proportionately. Minimum Salary/Fee Rate (More than 50 Washington Employees) Minimum Salary/Fee Rate (50 or Fewer Washington Employees) July 1, 2020. $585 = 40x +5 (1.5x) Effective January 1, 2020, employers must pay employees a salary of at least $684 per week. $585 = 47.5x All three of the above exemptions require payment of a true salary: "Salary" is defined as agreed-upon periodic compensation, intended to cover a period of at least a week, equivalent to at least $684 per week,* that is not subject to reduction on the basis of quantity or quality of work performed. The wage and hour team at Franczek PC created this blog to provide timely, practical insights on wage and hour law to employers. Minimum wage laws can affect businesses of all sizes, whether operating … Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). This rule took effect on January 1, 2020. Erin defends employers against discrimination cases filed in a variety of forums, including state and federal court, the Illinois Department of Human Rights, the Equal Employment Opportunity Commission and the Chicago Commission on Human Relations. Copyright ©2018 R.C. 40 hours times $12.315 = $492.60 The duties tests remain intact. The United States Department of Labor issued a final regulation to take effect January 1, 2020, raising the minimum overtime salary threshold for exempt employees under federal law to $35,568. We would need to lower that hourly rate to an amount that, with 5 hours of overtime each week, would equal the current wage of $585 per week. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. We will keep you updated on any new developments as the effective date of the new rule approaches. Specifically, exempt employees must earn a fixed monthly salary of at least double the minimum wage for full-time employment. New York State employers, though, must be mindful that, also as of January 1, 2020, they must pay exempt employees substantially higher minimum salaries, or those employees may be eligible for overtime pay under New … The key, of course, is to make the salary arrangement in writing, in advance, with the employee. Bill is a partner at Franczek P.C. The minimum annual salary is $35,568.00, or $684.00 per week. Under Colorado’s new regulations, the state minimum salary threshold for exempt employees will become $35,568, or $684.00 per week, effective July 1, 2020… Washington state and Seattle minimum wages for non-exempt employees are set to go up on January 1, 2020. A second option is to calculate an hourly rate that will be equal to what the employee made previously as an exempt employee, but now including the overtime. 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