In order for an exemption to apply, an employees specific job duties and salary must meet all the requirements of the Departments regulations. Employers seeking to classify employees as exempt from overtime should ensure employees meet both federal and state exemption criteria. In 2022, employees in Washington must earn a salary of at least 1.75 times the minimum wage for a 40-hour workweek to qualify for exemption. But thats not the case with new state or local wage-hour laws. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies. This chart is based on state law and is intended for private sector, for-profit employers. This rate must be used to calculate other wage and hour requirements such as overtime and spread of hours. Wages may be paid in a variety of ways and can include incentive pay or commissions. Employers would be wise to confirm that their payroll and human resources departments in fact made the changes they needed to make to be ready to comply with the new state and local requirements. As reflected in the charts below, minimum wages increased in dozens of states and localities when the new year rang in on January 1, 2022 and exempt salary thresholds also increased in some states effective January 1, 2022. How high might it go? Changes to Overtime Rules - Washington State Department of Labor This fact sheet provides information on the salary basis requirement for the exemption from minimum wage and overtime pay provided by Section 13(a)(1) of the FLSA as defined by Regulations, 29 C.F.R. Subject to exceptions listed below, an exempt employee must receive the full salary for any week in which the employee performs any work, regardless of the number of days or hours worked. The federal Fair Labor Standards Act (FLSA) requires that employers pay most employees at least the federal minimum wage for each hour worked as well as overtime pay for all hours worked in excess of 40 in a workweek. Note that there are special rules for tipped employees, who may be paid up to $3.00 per hour less than the minimum wage if the employee receives at least the minimum wage for all hours worked. The employer has an obligation to ensure an employee earns the applicable minimum wage rate for every hour worked. California Expands CalSavers/Retirement Plan Requirement to All Employers State DOL Website 2022 Salary Threshold 2023 Change *Effective 1/1/2023 Last Updated Alabama Visit Here $35,568 (Current Federal) N/A 7/24/2009 Alaska Visit Here $43,014.40 $45,136 Employers may want to consult legal counsel about how this rule may impact them. Isolated or inadvertent improper deductions will not result in loss of the exemption if the employer reimburses the employee for the improper deductions. If you live in a county with a special exempt threshold and do not see it listed, visit your district Department of Labor website to obtain accurate information. .agency-blurb-container .agency_blurb.background--light { padding: 0; } The FLSA allows for exemptions from these overtime and minimum wage requirements for certain employees who work in administrative, professional, and executive jobs (known as "exempt" employees). The sizes of the putative classes have ranged from 75 to approximately 15,000 employees. Exempt employees do not need to be paid for any workweek in which they perform no work. If the employer pays different wage rates, they must be able to show the employees hours worked for each wage rate. If an employee earned wages at more than one rate of pay for the earning period, those rates must appear on the employees pay stub. provide a subminimum wage for "an individual whose earning capacity is impaired by physical or mental deficiency, age, or injury." Next Steps: As of December 12, 2022, Alaska employers must pay workers with disabilities at least the state minimum wage of $10.34 per hour. Enter to open, tab to navigate, enter to select, Practical Law Practice Note Overview w-013-7477, https://content.next.westlaw.com/practical-law/document/I19eee08b287511e89bf099c0ee06c731/Minimum-Salary-Thresholds-for-Executive-Administrative-and-Professional-Exemptions-Under-State-Law-Chart-Overview?viewType=FullText&transitionType=Default&contextData=(sc.Default), Minimum Salary Thresholds for Executive, Administrative, and Professional Exemptions Under State Law Chart: Overview. Salary-Basis Test: New York generally follows federal rules for the salary-basis test. The 2022 salary threshold will change from $821.40 per week ($42,712 annually) for small employers and $958.30 ($49,831 annually) for large employers to $1,014.30 per week ($52,743.60 annually) for both small and large employers. $('.container-footer').first().hide(); *Note: The Department of Labor revised the regulations located at 29 C.F.R. Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. Yes. DOL Expected to Raise the Salary Basis Threshold | Locke Lord However, the FLSA provides an exemption from minimum wage and overtime pay for employees who work as executive, administrative, professional and outside sales employees. The department defined willfulness as 1) failing to follow advice from the Wage and Hour Division that conduct is not lawful or 2) failing to adequately inquire aboutwhether the conduct is in compliance with the FLSA. Former Wage and Hour Division Administrator Tammy McCutchen updated attendees of the SHRM Employment Law & Compliance Conference 2022about the salary threshold for white-collar exemptions in the proposed overtime rule due out soon. $("span.current-site").html("SHRM China "); Please log in as a SHRM member before saving bookmarks. .cd-main-content p, blockquote {margin-bottom:1em;} That wage order covers industries other than hospitality and building services. temp_style.textContent = '.ms-rtestate-field > p:first-child.is-empty.d-none, .ms-rtestate-field > .fltter .is-empty.d-none, .ZWSC-cleaned.is-empty.d-none {display:block !important;}'; State Law Updates Minimum Wage and Exempt Salary Threshold Increases. The National Law Review - National Law Forum LLC 3 Grant Square #141 Hinsdale, IL 60521 Telephone (708) 357-3317 ortollfree(877)357-3317. federal court in Texas held to be invalid, set the salary threshold at $47,467 per year. Factors to consider when determining whether an employer has an actual practice of making improper deductions include, but are not limited to: the number of improper deductions, particularly as compared to the number of employee infractions warranting deductions; the time period during which the employer made improper deductions; the number and geographic location of both the employees whose salary was improperly reduced and the managers responsible; and whether the employer has a clearly communicated policy permitting or prohibiting improper deductions. The minimum wage for health care aides effective October 1, 2022, is $17.00 per hour in New York City, Long Island and Westchester. Contact the USDOL at (866) 487-2365 for more information. Such an employer is required to pay the New York City Large Employer minimum wage rate. 2023 ADP, Inc. All Rights Reserved. You can find more answers to questions about these exemptions. . As a result, the minimum salary required for the executive and administrative exemptions will increase on December 31, 2021 as follows: Note: There is also a professional exemption under state law. The most commonly used exemptions are for administrative, executive and professional jobs, which are collectively called white-collar exemptions. Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level. Yes. Twenty-five states have scheduled a minimum wage increase for some time during 2022, according to the National Conference of State Legislatures. The Washington state overtime threshold for exempt jobs as of January 1, 2022 is set by state rule at 1.75 times the state minimum wage and will be $1,014.30 per week. As a reminder to . Below are the jurisdictions with laws that require exempt employees to have a salary basis above the FLSA threshold to be considered exempt employees as of Jan. 1, 2023. The employer must pay the Large Employer minimum wage rate to any employee who works within New York City during the current calendar year. Employees who work in the balance of the State (outside of New York City or Nassau, Suffolk and Westchester counties, other than Fast Food Workers) will reach $14.20 per hour on December 31, 2022. "We expect to see some increases in the minimum salary threshold in some states, but these increases are likely to move at a much slower rate than the hourly minimum wages for nonexempt employees," he said. While the Fair Labor Standards Act sets a federal threshold for salaried (exempt) employees, several states have their own regulations. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRMs permission. To request permission for specific items, click on the reuse permissions button on the page where you find the item. When the economy is unstable, employers are faced with difficult decisions around staffing, pay and benefits. Before the Fifth Circuit reviewed Judge Mazzant's decision, the Trump administration rescinded the rule and raised the salary threshold to the current $684/week standard. She suggested that employers invest in training for their managers to create a culture of compliance. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely. Note: In Colorado, an exempt employee's salary generally must also be sufficient to satisfy the minimum wage for all hours worked in a workweek. Federal law establishes a minimum salary of $684 per week for the professional exemption. Employers in Washington may pay computer professionals by the hour (if at least $50.72 per hour in 2022) or on a salary basis (if at least $1014.30 per week in 2022) for those employees to qualify for an overtime exemption. Members can get help with HR questions via phone, chat or email. To qualify for the white-collar exemptions, employees must perform certain duties, be paid on a salary basis and meet a minimum salary threshold. Some changes will occur later in the year. . div#block-eoguidanceviewheader .dol-alerts p {padding: 0;margin: 0;} Effective December 31, 2021, the statewide general minimum wage publishes industry-specific posters for use in compliance with this obligation. Need help with a specific HR issue like coronavirus or FLSA? 2022 Sees Increases to Minimum Wage Rates and Exempt Salary Thresholds There is no lower wage rate established for trainees or youth. $("span.current-site").html("SHRM China "); Please log in as a SHRM member before saving bookmarks. temp_style.textContent = '.ms-rtestate-field > p:first-child.is-empty.d-none, .ms-rtestate-field > .fltter .is-empty.d-none, .ZWSC-cleaned.is-empty.d-none {display:block !important;}'; If the employees rate of pay increases, the increase must be reflected in the wage statement provided with their paycheck. NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. An employer may pay the highest rate for all hours worked, or pay each hour worked in each region at the applicable minimum wage rate for that region. Yes, every employer must provide notice by posting the applicable minimum wage poster. If that amount were adjusted for inflation, it would nowbe $56,836 annually, McCutchen noted. Yes. Learn how SHRM Certification can accelerate your career growth by earning a SHRM-CP or SHRM-SCP. NYS Exempt Employee Salary Threshold Increases While the primary goal of the rule is to update the minimum salary-level requirement for white-collar exemptions, changes to the duties tests also will be considered, said McCutchen, who is astrategic advisor for New York City-based ComplianceHR. Job titles do not determine exempt status. For example, New York's rates changed on Dec. 31, while California's new statewide rates took effect on Jan. 1. If an actual practice is found, the exemption is lost during the time period of the deductions for employees in the same job classification working for the same managers responsible for the improper deductions. Chicago: $15.00 per hour (employers with 21 or more employees); $14.00 per hour for smaller employees; tipped employees must be paid at least $9.00 per hour for larger employers and $8.40 for smaller employers. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials. California Supreme Court Lets It Stand That CDTFA Can Decide Who Is OFCCP Requires Federal Contractors to Implement Revised Voluntary DOJ Targets Health Care Fraud Schemes Exploiting COVID-19 Pandemic In EPA has issued an "order" permitting continued PFAS Montana and Tennessee Could Become Eighth and Ninth States to Enact Hunton Andrews Kurths Privacy and Cybersecurity. The employee must also meet the job duties test. The National Law Review is a free to use, no-log in database of legal and business articles. } If you would ike to contact us via email please click here. $(document).ready(function () { New Minimum Wage Increases and Revised Exempt Salary Thresholds For example, the Massachusetts Emergency COVID-19 Paid Sick Leave Law was extended through April 2022. It follows a similar method to California. var temp_style = document.createElement('style'); However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Speaking on March 29 in Washington, D.C., McCutchen predicted that the The Trump administration's 2020 overtime rule raised the salary threshold to $35,568 per year. Be aware that changes may have taken effect on Dec. 31 or Jan. 1, even if they were enacted or passed months or years earlier, noted Robert Whitman, an attorney with Seyfarth in New York City. She noted thatshe led the effort to revamp the duties tests in 2004. . Overtime Rules Resources Before classifying and treating any employee as exempt from overtime, employers should confirm that the employee satisfies all applicable tests for overtime exemption under federal and state laws. "On the federal level, increasing the minimum wage is certainly a goal of the Biden administration," observed Charles McDonald, an attorney with Ogletree Deakins in Greenville, S.C. "There are several bills pending that include an increase to the federal minimum wage, but we don't expect to see any movement until closer to the 2022 elections.". And $16.20 per hour for the remainder of New York State, effective December 31, 2022. As a result, employers with 26 or more employees must pay a salary of at least $1,200 per week beginning January 1, 2022 to qualify for the exemption. The U.S. Department of Labor outlines the categories and the tests that must be met under the federal FLSA. New York Rings in 2022 with Employment Law Updates Find the latest news and members-only resources that can help employers navigate in an uncertain economy. Build specialized knowledge and expand your influence by earning a SHRM Specialty Credential. For these two exemptions, the state generally sets the minimum salary requirement at 75 times the state minimum wage, which differs based on the region of the state. An official website of the United States government. The employer will lose the exemption if it has an actual practice of making improper deductions from salary. These salary requirements do not apply to outside sales employees, teachers, and employees practicing law or medicine. its fall 2021 regulatory agenda.

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