I Just Want To Run My Business!
Last month, the Department of Labor issued its final rule related to exempt versus non-exempt employees. As a refresher or for those that don’t know the difference, exempt employees essentially include positions that perform executive, administrative, professional and/or sales roles for an organization (i.e., they are not subject to minimum wage or overtime).
The big threshold for determining the difference was the salary test (FYI, there are actually three tests, but salary is the “hot button topic” for most employers). Currently, if an employee is paid $684 or more per week ($35,568/year), they would likely be considered exempt. If they are paid less, they are non-exempt (unless they are in outside sales or some type of professional occupation like doctors, lawyers and teachers). Moving forward there are new salary thresholds that will apply (see below):
Standard Salary Threshold:
- July 1, 2024-December 31, 2024 – $884/week ($43,888 per year)
- January 1, 2025 – June 30, 2027 – $1,128/week ($58,656 per year)
- July 1, 2027 and every three years thereafter – Automatically updated based on the then current data
Highly Compensated Employee Threshold:
- July 1, 2024-December 31, 2024 – $132,964 per year
- January 1, 2025 – June 30, 2027 – $151,164 per year
- July 1, 2027 and every three years thereafter – Automatically updated based on the then current data
Like other recently enacted business regulations, this rule will likely trigger legal challenges. However, until one is successful, you may want to review your employee’s current classification. Ignoring these new rules could put your organization at risk for overtime claims and related penalties and fines. Your professional business advisors can help you through this process. Ah yes, the joys of business ownership and leadership!
A few things that may be of interest:
- Bill Introduced to Repeal Small Business Ownership Registry (nfib.com)
- Final FTC Non-Compete Rule a Compliance Nightmare (nfib.com)
- Lenders that Pay Lip Service to Non-Sponsored Deals (youtube.com) (thanks to David Barnitt from Attract Capital for sharing)
As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.
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