PPB January 2020

M any companies mistakenly believe it is up to them to decide whether to pay their employees on an hourly (non-exempt) or salaried (exempt) basis. Often, they classify employees, such as customer service reps and inside sales professionals, as exempt and salaried when, in fact, the law requires hourly pay and overtime eligibility. The Fair Labor Standards Act (FLSA), administered by the U.S. Department of Labor (DOL), establishes a duties test and a salary test that employers must consider when classifying an employee as non-exempt or exempt. Non-exempt employees must be paid at least minimum wage for all hours worked and overtime pay for more than 40 hours worked in a work week. Employers must track and keep record of the exact time worked to ensure all employees are paid correctly. Employees whose white- collar job responsibilities satisfy the various DOL “duties test” and who earn at least the minimum salary threshold established by the DOL can be classified as “exempt” from the minimum wage, overtime and exact-time-record requirements. To review the various white-collar exemptions, search online for DOL Factsheet #17. On September 24, 2019, the DOL released the highly-anticipated final rule increasing the minimum salary level for white-collar and highly-compensated exempt employees. No changes were made to the duties test. This is the first time changes have been made to this rule since 2004. These changes went into effect January 1, 2020. Changes to overtime rules went into effect on January 1, 2020. Here’s what you need to know. by Paige McAllister Working Overtime 92 | JANUARY 2020 | THINK