The DOL’s Proposed Increase in Wages

15 Aug The DOL’s Proposed Increase in Wages

The Department of Labor is proposing to raise the minimum salary for exempt (not eligible for overtime) positions from $23,660 to $50,440.

This means, if the proposal survives challenges and becomes law in 2016, you would need to decide if you want to:

1.      Give raises to people who currently are salaried exempt but make less than $50, 440/year to keep them in the exempt category; or
2.      Leave their pay at the current level, change their status to non-exempt, and pay them overtime (1.5 x regular rate) for any hours over 40 in each work-week.

The salary level will most likely adjust each year based on the 40th percentile of wages in the workforce, so this will be an annually moving number.

REAL-HR has been following this since last year and has provided relevant reports to our clients to help make these decisions.  We are recommending that businesses review the payroll to see what potential budget increases you may incur for 2016 if this proposal becomes law. It will be challenged, so the dollar amount and other details may change before compliance is required.  There’s a 60 day comment period followed by political wrangling, so it could be a while before it becomes official.  Spring to summer 2016 is a reasonable guess.

If you want to see the Department of Labor page that discusses this proposal, check it out here.

 


Scott Mastley, SPHR, MBA, is the Vice President of Human Resources for Resource Alliance. Scott is a consultant, not an attorney, so he shares his opinions, not legal advice, about increasing performance and limiting liability.