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It’s Official: $684 Per Week Will Be the New Minimum Salary for Exempt Employees

It’s Official: $684 Per Week Will Be the New Minimum Salary for Exempt Employees

The US Department of Labor issued a final ruling today on the new salary threshold for salary exemption: $684 per week (equivalent to $35,568 p

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The US Department of Labor issued a final ruling today on the new salary threshold for salary exemption: $684 per week (equivalent to $35,568 per year for a full-year worker). Anyone who earns less than this becomes eligible for overtime pay, regardless of actual duties.

Who Will Be Affected?

The Department of Labor estimates that 1.2 million people will become eligible for overtime pay under this new rule. However, if a state has a higher threshold (like California) this ruling doesn’t affect them. The federal law is the minimum and states are free to have higher levels.

The people most likely to be affected are retail and restaurant managers who qualify for exemption under the duties test, but have low salaries. Additionally, people who work for non-profits or political campaigns (which have traditionally low salaries) may find themselves overtime-eligible. Another group would be part-time professional employees. There isn’t an exception for people who are working part-time.

Is This Good News or Bad News?

It really depends on how your company implements the rule change. They can simply take your current salary, to get an hourly rate for 40 hours a week, and make that your hourly wage. If you work more than 40 hours in a week you’ll get overtime pay. However, if you’re regularly working more than 40 hours a week, your employer may adjust your hourly wage so that your hourly wage plus overtime roughly equals your current salary.

Some employees will feel a loss of freedom as they will have to track their hours, punch a time clock, and may lose some freedom like working from home, if their management doesn’t trust unsupervised hourly work. 

But, overall, it’s been a long time since we’ve had a bump in the threshold limit and this is based on the same formula, so I doubt we’ll see the lawsuits and complaining that happened in 2016.

What to Do if You Are Affected

As your boss or HR department how your company will implement this new ruling. If your company does year-end salary increases, it’s important to work these new pay requirements into the year-end increases.

And please remember, this doesn’t say anything about your abilities or values. You’re still the same person doing the same job-it’s an administrative change. Hopefully a positive one. 

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

This article is from Inc.com

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