On December 31, 2019, the state minimum weekly salary for administrative and executive employees will range from $885.00 per week for employees outside of New York City and Nassau, Suffolk and Westchester counties, to $1,125.00 per week for employees who work in New York City for large employers and Fast Food Establishments. Bill is a partner at Franczek P.C. The new thresholds will go into effect on Jan. 1, 2021. Specifically, exempt employees must earn a fixed monthly salary of at least double the minimum wage for full-time employment. Likewise, the rule increases the salary level for the highly compensated employee exemption to $107,432. The new salary level is equivalent to $35,568 per year for a full-time worker. FLSA Salary Threshold Increase Effective January 1, 2020 Employers with operations outside of New York should also remember that, effective January 1, 2020, the standard salary level threshold for exempt employees under the FLSA will increase from $455 to $684 per week. Washington state and Seattle minimum wages for non-exempt employees are set to go up on January 1, 2020. Bill is a partner at Franczek P.C. To use this method we need a bit of algebra. Committing to updating the salary threshold more regularly. X= $12.315. Minimum Threshold 2020. Her practice focuses on counseling and representing employers on various employment and labor issues. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people. While the 2016 rule was criticized by many business and employer groups, the new final rule is drawing fire from advocates for workers, who wish to force the administration to adopt something closer to the blocked 2016 rules. This isn’t the first time in recent years that we’ve had a final rule issued increasing the salary threshold for the white-collar exemptions. Minimum Salary Threshold July 1, 2020 $684.00 per week ($35,568 per year) January 1, 2021 $778.85 per week ($40,500 per year) January 1, 2022 $865.38 per week ($45,000 per year) January 1, 2023 $961.54 per week ($50,000 per year) January 1, … Legal challenges to the new rules are highly likely to follow. Oregon law also permits the payment on a fee basis without jeopardizing the salary basis of otherwise exempt employees, provided the fees are paid each pay period and are not less than the equivalent of the applicable state minimum wage. Non-exempt employees may be paid on a salary basis, but they are still entitled to overtime for hours over 40. Under the rule, employers may apply a limited portion of certain nondiscretionary commissions and bonuses to meet the minimum salary level for the exemptions. Minimum Salary/Fee Rate (More than 50 Washington Employees) Minimum Salary/Fee Rate (50 or Fewer Washington Employees) July 1, 2020. Bill provides management and employee training on workplace legal issues, and also conducts workplace investigations and legal audits. If the criteria of the New York State exception match those in the FLSA, this Department usually applies the criteria consistently with the FLSA, its regulations, and interpretations issued by the U.S. Department of Labor. part 541 with an effective date of January 1, 2020.WHD will continue to enforce the 2004 part 541 regulations through December 31, 2019, including the $455 per week standard salary level and $100,000 annual compensation level for Highly Compensated Employees. Additional changes include: The new rule is set to take effect on January 1, 2020 and increase the number of overtime-eligible employees by 1.3 million. In 2021, exempt employees at smaller employers must be paid $827 per week ($43,004 annually) and $965 per week ($50,180 annually) at larger employers, consistent with the new MWA rules. Bill also has extensive litigation experience, representing employers in federal and state courts and administrative agencies such as the U.S. and Illinois Departments of Labor and the Equal Employment Opportunity Commission. Effective Jan. 1, 2020, the thresholds are: $54,080/year for employers with 26 or more employees. According to the new exempt employee law that went into effect January 1, 2020, all executive, administrative, professional, computer, and outside sales exemptions require that the employee … The minimum salary requirement for 2020 for white-collar workers is $54,080 for employers with 25 or fewer employees and $49,920 for employers with 26 or more employees. Increasing the total annual compensation threshold for highly compensated employees (“HCEs”) from $100,000 per year to $107,432 per year; Permitting employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the increase salary threshold; and. The key, of course, is to make the salary arrangement in writing, in advance, with the employee. The law introduced minimum wages and overtime pay, and created criteria for determining whether an employee is “exempt” from overtime pay requirements or is “non-exempt” and therefore entitled to overtime pay. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684* per week. The Final Rule goes into effect on January 1, 2020. Employees that are classified as exempt are automatically excluded from minimum wage and overtime requirements that the FSLA provides, as well as any state … As an example, if an employee makes a current salary of $585 per week and regularly works 45 hours per week, then he has a regular rate of $13 per hour. Salary-basis test. $684 per week ($35,568 annually)* *This is the current level required by federal law, which has been in effect since January 1, 2020. As of January 1, 2020, when the new federal rule will go into effect, the minimum … The annual minimum compensation for “highly compensated employees” (HCEs) also increases. $35,356 annually $684 weekly. Business groups and several states filed a lawsuit seeking to block the 2016 rules, arguing that the DOL exceeded its authority in adopting the rules. Erin is an associate at Franczek P.C. No changes to the duties test have been made. So, the regular rate may fluctuate from week to week. OAR 839-020-0004(30)(b). The 2016 rule also increased the minimum salary for HCEs (to $134,004), allowed employers to use nondiscretionary bonuses and incentive pay to satisfy up to 10% of the salary threshold, and provided for automatic annual updates to keep the minimum salary level adjusted to the 40th percentile of full-time salaried workers in the lowest-wage Census region. A federal district court in Texas agreed and blocked the rules from taking effect. The new rules start with setting the salary threshold at 1.25 times the state’s hourly minimum wage. Her labor experience includes preparing and representing clients during arbitration and unfair labor practice charge hearings, while her employment practice includes counseling…. Bill also regularly counsels…. raises the minimum salary requirement for white-collar exempt employees to $684 a week, from a previous high of $455 a week. October 3, 2021. Salary Threshold for Exempt Employees (2020) The tiered salary thresholds across the state are also rising in-line with the minimum wage. So, exempt employees in Massachusetts will also have to be paid at the new higher salary threshold beginning January 1, 2020. The FLSA and the State Minimum Wage Act exempt employees who work in a bona fide administrative capacity from the overtime pay requirements. Minimum Wage (2021) In keeping with the gradual increase in the State's minimum wage levels, the new tiered rates across the State, effective December 31, 2020, are listed below. Effective January 1, 2020, however, the minimum salary level to be exempt will increase to $684 per week ($35,568 per year). A second option is to calculate an hourly rate that will be equal to what the employee made previously as an exempt employee, but now including the overtime. So, if the employee worked 45 hours in a week, the overtime calculation would be: $500 divided by 45 hours= $11.11 for the regular rate. $585 = 40x +5 (1.5x) For example: the minimum wage in 2020 will be $13.50, or $540 per week for a … These solutions are allowed according to the code of federal regulations. Like the minimum wage, the salary levels depend on employer size and location. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. To re-structure the pay, the employer and employee must agree in advance on a given salary that will cover a certain number of hours. For 2020, exempt employees must be paid $684 per week ($35,568 annually), consistent with federal law. $585 = 47.5x For individuals to qualify as exempt employees, California requires that: They perform exempt duties more than 50% of their work time, and; Exempt executive, administrative, and professional employees earn a salary of no less than two times the state minimum wage for full-time employment. Seyfarth Synopsis: As they have each year since 2016, the minimum wage and exempt salary threshold will increase for New York employers effective December 31, 2020. Job titles do not determine exempt status. Minimum Salary Threshold. Read on for everything you need to know about the new ruling! 2. Increased Federal Salary Threshold for Exempt Employees Takes Effect on January 1, 2020 On September 24, 2019, the U.S. Department of Labor issued its final rule raising the minimum salary for exempt employees under federal law from $23,660/year (or $455/week) to $35,568/year (or $684/week), effective January 1, 2020. One solution is to re-structure the formerly exempt employee’s pay so that the new pay with overtime approximates what he was making previously without the overtime pay. The current minimum is $23,660.00, or $455.00 per week. As co-chair of the firm’s Labor and Employment Practice Group, Bill is particularly versed in all aspects of state and federal law relating to minimum wages, overtime, exemptions, and wage payment issues. Effective January 1, 2020, employers must pay employees a salary of at least $684 per week. In addition, the new minimum wage changes the 2021 thresholds … The federal increase in the white collar exemptions’ salary threshold has no effect on private sector employees in New York State, which uses tiered salary thresholds depending on where an employee works in the state. Salary Test for Exempt Employees . FOR WORKERS; FOR EMPLOYERS That is up from $13.50 an hour in 2020. Here are the highlights: 1. Some states have a higher salary threshold than the federal law (or have no HCE exemption or no credit for bonuses/commissions against the salary level or have more narrow duties requirements). The Washington State Department of Labor & Industries (L&I) has announced the state minimum wage for 2021 and calculated the new state minimum salary thresholds for overtime exempt employees. $23,660 annually $455 weekly. In 2014, Bill was named to the annual “40 Under 40” published by Law Bulletin Publishing which recognizes 40 attorneys under the age of 40 based on nominations by their clients, peers and the legal community. She has also defended employers before the Illinois Department of Labor and the Illinois Educational Labor Relations Board. The final rule takes effect on January 1, 2020 and raises the current minimum salary level for exempt employees from $455 per week, or $23,660 annually, to $684 per week, or $35,568 annually. Likewise, the rule increases the salary level for the highly compensated employee exemption to $107,432. New York City Employers (11 or more employees) / Executive and Administrative Exemptions. Just because an employer pays a salary that satisfies the new federal threshold does not mean that the employee is exempt under the minimum wage law of a state where the employee works. In 2016, the DOL, under President Obama’s administration, issued a final rule increasing the salary threshold to $913 per week … The minimum wage applies to most employees in Georgia, with limited exceptions including tipped employees, some student workers, and other exempt occupations.. For example, if the usual schedule is 45 to 50 hours per week, the agreement may be that $500 will cover all the straight time up to 50 hours per week. We will keep you updated on any new developments as the effective date of the new rule approaches. Minimum Wage Increase. $585 = 40x + 7.5x As co-chair of the firm’s Labor and Employment Practice Group, Bill is particularly versed in all aspects of state and federal law relating to minimum wages, overtime, exemptions, and wage payment issues. That is up from $13.50 an hour in 2020. The table below outlines New York’s 2020 minimum wage: The minimum wage is expected to increase annually until it reaches $15.00 per hour by the end of 2021 for all of New York State. Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. Under Colorado’s new regulations, the state minimum salary threshold for exempt employees will become $35,568, or $684.00 per week, effective July 1, 2020… The employee expects fair and ethical treatment by the employer in return for his work. So, exempt employees in Massachusetts will also have to be paid at the new higher salary threshold beginning January 1, 2020. Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). Increased Salary Threshold for Overtime Exemption Starting in 2023, the salary threshold will adjust (i.e., increase) automatically to an amount equal to the 10th percentile of all Pennsylvania workers who work in salaried exempt positions. 1.25 x Washington Minimum Wage ($35,100/year) ($675/week) (The new rate under the FLSA, effective January 1, 2020, is $35,568/year, or $684/week) Same as for larger employers. There are two aspects to this review – determine whether employees currently in exempt positions meet both the new minimum salary requirement and the duties test for an overtime exemption. The minimum annual salary is $35,568.00, or $684.00 per week. $780 per week ($40,560 annually) October 3, 2022. The minimum salary requirement for administrative, professional, and executive exemptions increased from $455 per week to $684 per week, or $35,568 per year on January 1, 2020. Rulka Human Resources Consulting, All Rights Reserved, New Minimum Salary for Exempt Employees as of 1/1/2020: How to Minimize the Impact, Employment Law for Managers and Supervisors. Minimum Threshold 2019. 10/6/2020. The salary threshold is an exemption criteria that sets a minimum pay threshold below which employees must receive overtime pay. Employers … Minimum Wage (2021) In keeping with the gradual increase in the State’s minimum wage levels, the new tiered rates across the State, effective December 31, 2020, are listed below. This method works best with standard workweeks. The duties tests remain intact. Minimum wage laws can affect businesses of all sizes, whether operating … In the event that the employee works less than the usual 45 hours, his pay would be less than $585; if he works more than 45 hours, his pay will be more than $585. The new rule is set to take effect on January 1, 2020 and increase the number of overtime-eligible employees by 1.3 million. increases the current-enforced compensation level for “highly compensated employees” (HCEs) from $100,000 to $107, 432 per year. Salary threshold implementation schedule Salary thresholds for overtime exempt workers are a multiplier of state minimum wage for a 40-hour workweek 2021 Salary thresholds Small businesses: $821.40/week ($42,712.80/year) Large businesses: $958.30/week ($49,831.60/year) When the rule takes effect July 1, 2020 Jan. 1, 2021 Jan. 1, 2022 Jan. 1, 2023 Federal / Executive, Administrative, and Professional Exemptions. 2020 California Salary Increases for Exempt Employees. More narrowly, the minimum salary level varies by business size. Total of $492.60 plus $18.48 = $585.00. Franczek P.C. This is only one of the factors used in determining whether a worker is exempt from overtime under federal or state law. Seyfarth Synopsis: As they have each year since 2016, the minimum wage and exempt salary threshold will increase for New York employers effective December 31, 2020.. is a labor and employment boutique law firm representing private and public sector employers in all aspects of labor and employment law, including counseling and compliance, employment litigation, union-related matters, and employee benefits. This number was based on the 20 th percentile of weekly earnings for full-time salaried workers in the lowest income census region (currently the South). The final rule takes effect on January 1, 2020 and raises the current minimum salary level for exempt employees from $455 per week or $23,660 annually, to $684 per week or $35,568 annually. There are options for reducing the impact of the new overtime rule. Each hour worked over 40 would pay an additional ½ of the “regular rate”. The current minimum salary was $455 per week, or $23,660 annually. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people. This arrangement works well with fluctuating work week hours. The minimum annual salary is $35,568.00, or $684.00 per week. As with any business decision, all factors should be considered before making a final determination. The FLSA's minimum salary requirement is set to remain the same in 2021. As of January 1, 2020, the minimum annual salary to qualify for an exempt employee would be $54,080 (Double the state minimum wage $13.00/hour for employers with 26 or more employees is $26.00/hour x 40 hours/week x 52 weeks = $54,080). With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, the thresholds will also rise on Jan. 1, 2021. The federal increase in the white collar exemptions’ salary threshold has no effect on private sector employees in New York State, which uses tiered salary thresholds depending on where an employee works in the state. The new thresholds will be effective December 31, 2019 and will depend on employer size and location. On Tuesday, the U.S. Department of Labor issued its final rule concerning overtime exemptions. The New York State minimum wage rates and minimum overtime-exempt salary levels for employees working outside of New York City will increase on December 31, 2020. In addition to New York’s minimum wage increase, the minimum salary that must be paid to workers classified as exempt under New York State Labor Law’s administrative and executive exemptions increased for 2020. The new regulations require that as of Jan. 1, 2020, an employee in a white collar exempt position must be paid at least $684 per week. Effective January 1, 2020, however, the minimum salary level to be exempt will increase to $684 per week ($35,568 per year). Erin defends employers against discrimination cases filed in a variety of forums, including state and federal court, the Illinois Department of Human Rights, the Equal Employment Opportunity Commission and the Chicago Commission on Human Relations. Here are the highlights: 1. These numbers are calculated by doubling the applicable minimum wage, multiplying that … If an exempt employee’s salary drops below the minimum salary requirement, the employee may no longer be considered exempt. However, if there is any sort of contract, whether written or implied, with the employee regarding his compensation, then the employer’s ability to change the compensation may be limited. *Note: The Department of Labor revised the regulations located at 29 C.F.R. On January 1, 2020, California’s statewide minimum wage will increase to $13 per hour for employers with 26 or more employees and $12 per hour for employers with 25 or fewer employees. For 2021, the Washington minimum wage will be $13.69 per hour (an increase from the current $13.50 per hour). Frequently asked questions. January 1, 2021. The new minimum salary threshold falls between the current salary threshold and the rule proposed under the Obama administration. These employees are known as "exempt" employees. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. Then, any hours worked over 40 would require a payment of “half-time”, since the all the straight time would have already been paid. Each time the New York State minimum wage increases, the state’s minimum salary required for executive and administrative employees will increase proportionately. This change does not mean that anyone making $684 per week will be exempt from overtime. Copyright ©2018 R.C. Using our $500 example, the regular rate for a 42 hour week is $11.90, but the regular rate for a 49 hour week is $10.20. Although the overtime solutions presented here are legal, they may be perceived as unfair by employees who are expecting to earn more money when the new law is passed. $58,500 annually $1,125 weekly. The United States Department of Labor issued a final regulation to take effect January 1, 2020, raising the minimum overtime salary threshold for exempt employees under federal law to $35,568. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. Talk to an Expert 937-470-5790. For employers with 25 or fewer employees, the minimum annual salary would be $49,920. Employer Type / Exemption Type. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. The wage and hour team at Franczek PC created this blog to provide timely, practical insights on wage and hour law to employers. Salary is only one part of the requirements for exempt status. Up from $ 13.50 per hour ) hour ( an increase from the current federal minimum wage is $,. Also have to be paid at the new minimum salary requirement for status... Will also have to be paid at the new salary level is equivalent to 107,432! 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