DOL Issues New Salary Level Test for White Collar Exemptions

On March 7, the Department of Labor issued its Notice of Proposed Rulemaking, setting the new salary level for white collar exemptions at $35,308 per year (or $679 per week). In addition, the proposal raises the total compensation requirement for highly compensated employees from $100,000 to $147,414 per year.

The new rule raises the current annual salary level for white collar workers by more than $10,000, from $23,660 (or $455 per week). But, this increase is not nearly as dramatic as the Obama administration’s proposed rule which was set to take effect in December of 2016. The 2016 rule would have more than doubled the annual salary threshold, raising it from $23,660 ($455 per week) to $47,476 ($913 per week).

Notably, the new rule does not change the duties tests for any of the white collar exemptions (executive, professional, and administrative).

The proposed rule will be subject to a 60-day comment period and is expected to go into effect in January 2020, which will give employers plenty of time to review their white collar exempt positions and make decisions about reclassification or raising pay.