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KMA continues its series of blogs on various new state, federal, and local requirements that may affect you operations, HR compliance, and policies and procedures.

The Department of Labor (DOL) has issued a proposed change to increase the minimum salary amount for employees classified as exempt under the FLSA from $455 per week (which was set in 2004) to $970 per week in 2016. This annualizes to $50,440, up from $23,660.

KMA offers some insights on this change:

  • Changes to the duties tests for exempt classifications are not proposed but the DOL is inviting comments.
  • This change will require employees paid below this amount in businesses and occupations covered by the FLSA to be classified as non-exempt regardless of their duties, which will entitle them to overtime pay for hours worked over 40 in a workweek.
  • Once change goes into effect, all employers will need to review the positions they consider to be exempt to ensure they meet the new salary requirements.
  • This is also a good time to review all positions for correct classification under DOL standards, including those paid above $50,440, as there are currently duties tests in addition to the minimum salary requirement.

Need further help or guidance?

KMA recommends reviewing this change with your financial and operational staff to determine how it will impact your organization over the short- and long term. KMA is here to help you understand the issue and how best to implement changes for your organization. Contact KMA assistance.