Are Exempt Employee Limits Increasing?

Employees can have two different classifications - nonexempt or exempt. The difference is that nonexempt employees are entitled to receive pay for any overtime hours worked whereas exempt employees may not receive overtime payment. This classification can be specified in the job description but most often is determined by the weekly payment or salary range of the employee.

Since 2004, the rules that define salaries limits for exempt employees are receiving $455 per week or $23,660 per year.  Currently, about 11% of salaried employees fall in this range.  However, the current administration is looking to increase those numbers.  Prior to 2004, the weekly rate was $155 and approximately 65% of salaried employees fell into this category.
 
Increasing today’s numbers would mean that more salaried employees would be eligible for overtime.  The final ruling is expected in February, but hints at the preliminary number range between $42,000 and $58,000.
             

  • $42,000 has been suggested by the White House which would result in about 35% coverage.
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  • $51,000 would cover about 47% of salaried employees, and be fairly close to the pre-2004 levels when inflation is taken into consideration.
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  • $58,000 has been suggested by the DOL which would result in about 54% coverage.

 
Check back with Optimum’s blog to for updates on the final ruling. To learn more about how our HR & Payroll software can help you stay compliant no matter what changes are on the books, check out our free software demo today!

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