Here’s What REALLY Happened!

Effective December 1, 2016:

  1. The Salary Threshold changed from $455 per week to $913 per week
  2. (From $23,660 to $47,476 annually)
  3. The built-in mechanism for raising the salary is an increase every 3 years. The first will be January 1, 2020. DOL will adjust the threshold every 3 years.
  4. Highly Compensated Employee (HCE) exemption is now $134,000 (from $100,000)
  5. Non-discretionary bonuses, incentive pay, commissions may now be used to meet up to 10% of the standard salary.

Do these changes affect Non-profits?

Yes.

(Source: Federal Register)

“The Department concludes that such special treatment is not necessary or appropriate.”

“Finally, the Department is issuing additional guidance for the non-profit sector in connection with the publication of this Final Rule.”

…Churches?

The word “church” is not mentioned in the final rule.

…Teachers?

“The salary and salary basis requirements do not apply to bona fide teachers.”

…Clergy?

Ministers could be exempt, but there is an extremely broad interpretation of what individually covered means, so it is safer to treat ministers who are not volunteers as employees and pay minimum wage and OT unless they can pass any of the standard exemption tests.

…Outside Sales?

No.

“The salary requirements of the regulation do not apply to the outside sales exemption.”

…Computer Professionals?

Yes and no. Only salaried professionals are affected.

“Note that none of these workers are impacted by the rulemaking because they are paid on an hourly basis.”

…Schools?

Yes, but not teachers.
“Schools and institutions of higher education are generally covered by the FLSA's minimum wage and overtime provisions. Several provisions apply, however, to many employees at these institutions that exempt them from the Final Rule. Teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing.”

 

 

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