The U.S. Department of Labor has changed the standard salary level for “white collar” workers. White collar employees include executives, directors, and administrative employees such as office managers, professionals and marketing employees. Under the new rule, white collar workers that earn less than $913 per week or $47,476 annually will no longer be exempt, meaning employers must pay these workers overtime and minimum wage as well as comply with more rigid recordkeeping requirements. Keep in mind, an employer may count nondiscretionary bonuses, incentives and commissions toward and up to ten percent (10%) of the required salary level to determine whether a worker meets the salary requirement threshold, so long as the employer pays those amounts on a quarterly or more frequent basis. This means an employer can pay a white collar worker a base salary of $42,728.40 plus nondiscretionary bonuses of $4,747.60 or more (if paid quarterly or more frequently) and avoid the overtime and recordkeeping requirements for that worker. These changes go into effect on December 1, 2016.
The video delves into more detail about this new change and how it might impact your business. As always, feel free to give us a call or email us with any questions.