Many of remember the summer and fall of 2016 when the Obama Department of Labor (DOL) announced and later approved an increase in the minimum salary threshold to qualify to be classified as exempt under the Fair Labor Standards Act from $23,660 to $47,476. This had employers scrambling, and the Davidson Group team was very busy helping its clients work through this new legislation. Fortunately for employers, legal challenges delayed the implementation of the new rule.
The Trump DOL revisited the issue and announced in 2019 that the threshold would be raised to $35,568. This seemed a reasonable compromise, and everyone moved on.
Fast forward to 2023 when the Biden DOL announced it was considering another increase, this time from $35,568 to $55,068. This rule could go into effect any time as the 60-day comment period ended November 7. Just like the Obama proposal, this is a HUGE increase that will no doubt affect a lot of positions in a lot of companies. Many Davidson Group clients have positions categorized as exempt that pay between the $35,568 threshold and $50,000 annually.
Now is a good time for employers to revisit their employment classifications to see if employees are correctly classified under the current rules. The Davidson Group can review your options to determine if the new rules might cause your organization to be out of compliance.
As always, we’re happy to assist. Contact the Davidson Group at 336-294-5053 for guidance on this new ruling.
