How Much Is Enough? White Collar FLSA Exemption To Be Reconsidered Again

October 26, 2018 at 9:45 am Leave a comment

The Trump Administration signaled yesterday that it planned on issuing new regulations setting the minimum salary level for employees to qualify for the so-called white-collar “exemption” from overtime rules mandated under the Fair Labor Standards Act.

If this sounds familiar it’s because we went through all this at the tail end of the Obama Administration. First, with apologies to those labor law experts out there, let’s review some of the basics. The Fair Labor Standards Act set a federal minimum wage for all employees and mandated that employees who work more than 40 hours a week must be compensated for that additional work (i.e. paid overtime). At the same time, the Act exempted from the overtime requirement employees who work in a bonafide executive, administrative or professional capacity who also make a certain minimum salary level. The minimum salary level for the so-called white-collar exemption was last updated in 2004 to $455 per week. In addition, there is also exemption from the overtime requirement for “highly compensated employees” which requires that the employee earn at least $100,000 in total compensation.

In 2016, the Obama Administration’s Department of Labor finalized regulations which, among other things, raised the minimum salary requirement for employees to be eligible for the white-collar exemption from $455 a week to $913 per week, which comes out to an annual salary of $47,476. The increase presented challenges to some credit unions that confronted the possibility of having to pay overtime for managers they previously classified as exempt, but who didn’t make enough to qualify for the white-collar exemption.

Fortunately for them, the regulation never took effect and the Trump Administration has repeatedly signaled its intention to revisit the issue. According to the Corporate Legal Update blog, which tipped me off to this update, proposed regulations are expected sometime in early 2019. But remember, as I noted, this is only a partial relief for those of us in New York.

Next year, the minimum salary for New York’s version of the white-collar exemption is scheduled to go up again next year. Remember, under New York’s approach, the minimum salary requirement varies by geographic area. For example, starting next January, the minimum salary for someone to qualify for New York City’s white collar exemption at a small employer would increase from $900 a week to $1,012.50 per week. In upstate districts, the minimum salary for the exemption increases from $780 per week to $832 per week. In Nassau, Suffolk and Westchester counties, the exemption threshold will increase to $900 per week from $825 per week.

Make sure you check with your labor law attorney to get a better feel of how these legal requirements will affect your credit union.

On that note, enjoy your weekend.


Entry filed under: General, New York State. Tags: , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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