Before classifying and treating any employee as exempt from overtime, employers should confirm that the employee satisfies all applicable tests for overtime exemption under federal and state laws. Additionally, rates may vary based on geographic location, employer size or industry, "so be sure to check state and local laws where you operate to ensure that you're following the applicable minimum wage," Whitman said. The US Department of Labor issued a final ruling on the new salary threshold for salary exemption: $684 per week (equivalent to $35,568 per year). Members may download one copy of our sample forms and templates for your personal use within your organization. McCutchen predicted that if the DOL increasesthe salary threshold to $50,000 or above, "there will be litigation all over again by employer interest groups.". New Minimum Wage Increases and Revised Exempt Salary Thresholds (2) $101,250 for those who meet the duties-requirements for HCE employees. Elimination of Paper Documentation in Streamlined Entry Process NLRB Will Not Stop Short in Imposing Remedies for Failure to Bargain, A Definitive Guide to Master Law Firm Business Development. The employer must pay the Large Employer minimum wage rate to any employee who works within New York City during the current calendar year. document.head.append(temp_style); You may be trying to access this site from a secured browser on the server. Remaining in effect for the duration of 2022 is a measure enacted in March 2021 . If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor. The minimum wage for health care aides effective October 1, 2022, is $17.00 per hour in New York City, Long Island and Westchester. Copies of the posters are available. reinstated a Trump-era independent contractor rule, the DOL is likely to appeal that decision, she said. Find the latest news and members-only resources that can help employers navigate in an uncertain economy. An employer may pay the highest rate for all hours worked, or pay each hour worked in each region at the applicable minimum wage rate for that region. For the outside sales employee exemption, there is no minimum salary requirement. California Supreme Court Lets It Stand That CDTFA Can Decide Who Is OFCCP Requires Federal Contractors to Implement Revised Voluntary DOJ Targets Health Care Fraud Schemes Exploiting COVID-19 Pandemic In EPA has issued an "order" permitting continued PFAS Montana and Tennessee Could Become Eighth and Ninth States to Enact Hunton Andrews Kurths Privacy and Cybersecurity. The exempt salary thresholds in Alaska and Maine are also tied to the state minimum wage, although Alaska's minimum wage is not scheduled to change for 2022. To be considered "exempt," these employees must generally satisfy three tests: Note: There are also exemptions for outside sales and computer professional employees. The list includes some special districts in states but does not include all of said districts. Employees must be made aware of the pay rate applicable to the work they perform. However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. To determine whether the fee payment meets the minimum salary level requirement, the test is to consider the time worked on the job and determine whether the payment is at a rate that would amount to at least $684* per week if the employee worked 40 hours. As mentioned above, to qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis. Seenew exemption threshold. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organizations culture, industry, and practices. While the Fair Labor Standards Act sets a federal threshold for salaried (exempt) employees, several states have their own regulations. COVID-19 Vaccination Leave Continues in 2022. Please enable scripts and reload this page. 2023: $54,132 2024: $62,920.L&I is using a multiplier of the state minimum wage to determine the minimum salary threshold.2. Additionally, any decreased rates must be communicated to the employee prior to the performance of work at the lower rate of pay. Yes, until the minimum wage reaches $15.00, different minimum wage rates will be in effect in the following areas of the state: (1) New York City, (2) Westchester County and Long Island, (3) the remainder of New York State. To be classified as exempt from New Yorks overtime requirements, executive and administrative employees must meet minimum salary requirements and satisfy certain duties tests. In such cases, employers who are subject to state overtime requirements must pay overtime at time and a half. New salary threshold implementation schedule Threshold phase-in schedule for computer professionals paid hourly Understanding the job duties tests "Given the current labor market, employers should also pay close attention to how much their competitors are offering to pay employees.". var temp_style = document.createElement('style'); ~$65,478.40 (2 x Minimum Wage, Employers with 51 or more Employees). The final rule is available at: https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and. In general, employers who are covered by both state and federal laws must pay employees the higher rate, whether it is the minimum wage or the weekly minimum salary. Under the federal rule, any administrative, executive or professional employee who earns less than this becomes eligible for overtime pay, regardless of actual duties, beginning January 1, 2020. As a reminder, under the (FLSA), all employees must be paid at least minimum wage plus overtime for all hours worked. A reminder that the professional exemption is not covered by the NYS salary threshold and would therefore defer to the federal FLSA salary threshold, currently $684 per week ($35,568 when annualized). When the economy is unstable, employers are faced with difficult decisions around staffing, pay and benefits. These exemptions are often called the white-collar or EAP exemptions. French Insider Episode 21: Between Warring Giants: How European What Appellate Courts Are Missing About PAGA Standing After Viking New Antidumping and Countervailing Duty Petition on Non-Refillable After May 15, 2023, PERMs Must Be Filed Via DOLs FLAG System, Applying for an Emergency or Urgent Expedited U.S. Passport, UFLPA Enforcement Remains Work in Progress. Computer professionals who are paid hourly have their own schedule of estimated increases. When the economy is unstable, employers are faced with difficult decisions around staffing, pay and benefits. Build specialized knowledge and expand your influence by earning a SHRM Specialty Credential. Federal law establishes a minimum salary of $684 per week for the professional exemption. The FLSA allows for exemptions from these overtime and minimum wage requirements for certain employees who work in administrative, professional, and executive jobs (known as "exempt" employees). The .gov means its official. The tiered salary thresholds required for exempt status are also rising effective December 31, 2021. DOL Is Seeking Liquidated Damages and Civil Penalties. Gina Merrill, an attorney with King & Spalding in New York City, said employers can benefit from conducting an annual review of pay practices. With the calendar turning to 2022, workers in over two dozen states and localities could see a pay increase as a result of legislation raising applicable minimum wage or exempt salary thresholds. On December 31 of each year, starting in 2021, the minimum wage for Group 5 will be increased at rates to be determined annually until the minimum wage reaches $15.00 per hour. There is no lower wage rate established for trainees or youth. Please purchase a SHRM membership before saving bookmarks. Flagstaff: $12.80 per hour: This is a $0.65 increase from the 2021 rate of $12.15 per hour. Connecticut's minimum wage will increase to $14 on July 1, and Florida's will rise to $11 on Sept. 30. Exempt Employees: 2023 Minimum Salary Requirements Employers would be wise to confirm that their payroll and human resources departments in fact made the changes they needed to make to be ready to comply with the new state and local requirements. DOL Expected to Raise the Salary Basis Threshold | Locke Lord Information about commissions or other payments may be found by downloading. California, meanwhile, also stipulates that exempt employees must earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. *Note: The Department of Labor revised the regulations located at 29 C.F.R. temp_style.textContent = '.ms-rtestate-field > p:first-child.is-empty.d-none, .ms-rtestate-field > .fltter .is-empty.d-none, .ZWSC-cleaned.is-empty.d-none {display:block !important;}'; The changes are summarized below: To qualify for the administrative, professional, and executive exemptions in California, employees must meet certain salary and duties tests and must be paid at least twice the state minimum hourly wage based on a 40-hour week. 25 states are raising their minimum wage in 2022. The National Law Review is not a law firm nor is www.NatLawReview.com intended to be a referral service for attorneys and/or other professionals. The minimum wage will be phased in to reach $15.00 for the following groups on the dates set forth below. If the employee is paid an agreed sum for a single job, regardless of the time required for its completion, the employee will be considered to be paid on a fee basis. A fee payment is generally paid for a unique job, rather than for a series of jobs repeated a number of times and for which identical payments repeatedly are made. "That's high," McCutchen noted. In Washington, employees must satisfy certain salary and duties tests to be classified as exempt from overtime under state law. Although California's statewide COVID-19 supplemental paid-sick-leave law expired, Benjamin Ebbink, an attorney with Fisher Phillips in Sacramento, Calif., said employers could see a renewed push in the state Legislature to revive the benefit as the coronavirus pandemic continues. New York Minimum Wage and Exempt-Status Salary Threshold to Increase For information about minimum wage exclusions, see our. Minimum Wages Are On the Rise in Several States. If an employer (1) has a clearly communicated policy prohibiting improper deductions and including a complaint mechanism, (2) reimburses employees for any improper deductions, and (3) makes a good faith commitment to comply in the future, the employer will not lose the exemption for any employees unless the employer willfully violates the policy by continuing the improper deductions after receiving employee complaints. Employers with fewer than 26 employees must pay a salary of at least $1,120 in 2022 to qualify for the exemption. Any business that (1) employs one or more employees in New York City and (2) has. Employers should adjust their minimum exempt salary to $55,341 annually ($1,064.25 weekly) to reflect the increase that took effect December 31st, 2022 throughout the State. Exempt salary threshold by state 2023 .usa-footer .container {max-width:1440px!important;} Double Secret Probation! $("span.current-site").html("SHRM MENA "); . Pennsylvania Raises Salary Threshold, Updates Duties Tests with New Employees who work in the balance of the State (outside of New York City or Nassau, Suffolk and Westchester counties, other than Fast Food Workers) will reach $14.20 per hour on December 31, 2022. The site is secure. Computer software employees may be paid on an hourly or a salary basis in order to qualify for exemption from California's overtime requirements. Former Wage and Hour Division Administrator Tammy McCutchen updated attendees of the SHRM Employment Law & Compliance Conference 2022 about the salary threshold for white-collar exemptions in the . Anticipated Overtime Rule Previewed - SHRM Please confirm that you want to proceed with deleting bookmark. The federal Fair Labor Standards Act (FLSA) requires most businesses to pay employees 1 1/2 times their regular rate of pay for all hours worked beyond 40 in a workweek unless they fall under an exemption. Please enable scripts and reload this page. Merrill also noted that many employers are raising wages in response to labor shortages, "which cuts both ways in terms of what state legislatures might do," she said. The 2022 salary threshold will change from $821.40 per week ($42,712 annually) for small employers and $958.30 ($49,831 annually) for large employers to $1,014.30 per week ($52,743.60 annually) for both small and large employers. Although the federal rate remains $7.25 for now, the Department of Labor recently issued new minimum wage rates for employees who perform work in connection with federal contracts. Deductions from pay are permissible when an exempt employee: is absent from work for one or more full days for personal reasons other than sickness or disability; for absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness; to offset amounts employees receive as jury or witness fees, or for military pay; for penalties imposed in good faith for infractions of safety rules of major significance; or for unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions. }); if($('.container-footer').length > 1){ Find the latest news and members-only resources that can help employers navigate in an uncertain economy. Please log in as a SHRM member. $("span.current-site").html("SHRM China "); Oftentimes, there are no real consequences if a project gets pushed off into the new year. 2022 Sees Increases to Minimum Wage Rates and Exempt Salary Thresholds As a result of the Colorado Overtime & Minimum Pay Standards Order, the minimum salary required to qualify for the executive/supervisor, administrative, and professional exemptions under state law increases to $865.38 per week on January 1, 2022. $62,400 for employers with 26 or more employees; (1) $45,000 ($865.38/week) an exempt executive, administrative, or professional employee; $58,500 ($1,125/week) for employers in New York City. For the professional exemption, employees must satisfy certain duties tests, but there is no minimum salary requirement under state law. Minimum Wages Are On the Rise in Several States. 2023 Epstein Becker & Green, P.C. The minimum wage for health care aides effective October 1, 2022, is $17.00 per hour in New York City, Long Island and Westchester. .manual-search ul.usa-list li {max-width:100%;} ADP does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. Such an employer is required to pay the New York City Large Employer minimum wage rate. Enter to open, tab to navigate, enter to select, Practical Law Practice Note Overview w-013-7477, https://content.next.westlaw.com/practical-law/document/I19eee08b287511e89bf099c0ee06c731/Minimum-Salary-Thresholds-for-Executive-Administrative-and-Professional-Exemptions-Under-State-Law-Chart-Overview?viewType=FullText&transitionType=Default&contextData=(sc.Default), Minimum Salary Thresholds for Executive, Administrative, and Professional Exemptions Under State Law Chart: Overview. For the computer professional employee exemption, the employee may be paid by salary (as long as it is at least $684 per week) or by the hour (as long as it is at least $27.63 per hour). The employer may either charge the lesser meal allowance for every meal or charge the allowance applicable to where the employee ate the provided meal. This includes the new salary threshold of $990 per week ($51,480 when annualized) in effect as of December 31, 2021. The regular rate is determined by dividing gross earnings by the hours worked. m. On January 1, 2022, the minimum wage will increase to $14 per hour. Slowing the Spread of Litigation: An Update on First Circuit COVID-19 Has Your Business Attorney Met Your Estate Planning Attorney? Five states are increasing the minimum salary requirement for overtime exemption on January 1, 2022. Computer software employees may be paid on an hourly or a salary basis in order to qualify for exemption from California's overtime requirements. Under the state's exemption for highly technical computer employees, the employee may be paid by salary (at least $865.38 per week in 2022) or by the hour (under a state proposal, the minimum hourly rate would be $28.92 in 2022). #block-googletagmanagerfooter .field { padding-bottom:0 !important; } Five states are increasing the minimum salary requirement for overtime exemption on January 1, 2022. its fall 2021 regulatory agenda. Yes. With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, one of the thresholds multipliers will rise on Jan. 1, 2023. Taxable Income. Here are some wage and hour areas employers should check for compliance: Although the federal minimum wage has been $7.25 for years, 29 states and Washington, D.C., have higher rates, and some localities require employers to pay more than the respective state. Santa Fe City: $12.31 per hour for nontipped employees. with GovDocs Employment Law News. The ADP logo, ADP, RUN Powered by ADP, and HR{preneur} are registered trademarks of ADP, Inc. and its affiliates. As a result, employers with 26 or more employees must pay a salary of at least $1,200 per week beginning January 1, 2022 to qualify for the exemption. The overtime salary threshold limits will increase for the following states: California To qualify for the overtime exemption, a computer software professionals must earn at least $50.00 per hour or $104,149.81 annually ($8,679.16 monthly). In California, for example, the weekly salary threshold for the white-collar exemptions is calculated by doubling the state minimum wage and multiplying by 40 hours. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. Administrative, professional and computer employees may be paid on a fee basis rather than on a salary basis. McCutchen alsonoted that the DOL is regularly recovering double damagesor liquidated damagesonce again, after the Trump administration limited their use to when an employer acted in bad faith or willfully. In many cases, the state criteria are harder to meet than the federal criteria. FLSA Overtime Rule Resources The FAR threshold for performance and payment bonds at FAR 28.102 had one escalation adjustment in 2010, which raised the threshold by $50,000 from $100,000 and has since remained unchanged. See other fact sheets in this series for more information on the exemptions for executive, administrative, professional, computer and outside sales employees.
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