The new rule will apply to and impact only employees who qualify for one of the complete exemptions known as the “white-collar” exemptions. These exemptions may be available to employees who primarily perform job duties that are executive, professional or administrative and who are paid on a “salary basis.” To meet the salary basis requirement, an employee must receive a predetermined annualized salary amount that is at least equal to the minimum salary required by law for a white-collar exemption — and that salary cannot be subject to deduction based on the quantity or quality of the employee’s work. Employees who do not satisfy both the duties and salary basis requirements do not qualify for a white-collar exemption, even if they earn at least the minimum salary amount. WHAT WILL THE NEW RULE DO? The sole focus of the new rule is the salary component of the white-collar exemptions. It increases the minimum annualized salary required to qualify for the white-collar exemptions. The current minimum annual salary amount required under federal law for white-collar exempt employees is $35,568 or $684 per week. Under the new rule, the salary requirement will be raised in two phases (if the rule is implemented as planned). On July 1, 2024, the minimum annual salary for white-collar exempt employees increases to $43,888 or to $844 per week. And it is scheduled to increase again on Jan. 1, 2025, to $58,656 or $1,128 per week (again assuming the rule is implemented as planned, despite legal challenges). The expected consequence of increasing the minimum salary requirement is that employees who currently are eligible for a white‑collar exemption no longer will be after implementation of the rule because their employers will not be able or want to pay the increased salary. Employees who lose the exemption will be entitled to overtime pay 19 THE GENERATOR
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