The U.S Department of Labor has released a proposal that would set the minimum salary for overtime exempt employees at $50,440 a year, or $970 a week. Currently, the minimum salary is $23, 660 a year, or $455 a week.
This requires businesses to determine how many of their employees will need to be reclassified. For an employee that is non overtime exempt, the employer must pay them at least time and a half for any extra hour they work over 40. This new rule could cause problems for small businesses who need the flexibility that exempt status allows.
The rule is not final and there is no timeline for when it will be final. There will be a 60 day comment period after which the DOL will review the comments and make revisions to the proposal. After the revisions are made they will be published and a date will be set for when the rule becomes effective. They are not expected to be final until at least mid 2016.
However, the proposed changes should be something that employers are aware of so that they can begin to evaluate which employees will need to be reclassified, consider the extra costs of overtime involved, and review job duties and descriptions.