}); if($('.container-footer').length > 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. Subscribe to our blog for the latest employment law news. Although the federal rate remains $7.25 for now, the Department of Labor recently issued new minimum wage rates for employees who perform work in connection with federal contracts. 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. Please log in as a SHRM member. Merrill noted that the changes for federal contractors may "reflect the general enthusiasm" of the Biden administration to raise the minimum wage to $15 for all workers. You have successfully saved this page as a bookmark. New York States salary threshold is usually higher than the federal threshold, and that will remain the case if the federal courts continue to block the planned federal increases. To qualify for the exemption, employees must meet certain tests regarding their job duties and be paid on a salary basis of not less than $684 per week ($35,568 annually). Here are some wage and hour areas employers should check for compliance: Although the federal minimum wage has been $7.25 for years, 29 states and Washington, D.C., have higher rates, and some localities require employers to pay more than the respective state. Minimum Wages Are On the Rise in Several States. .cd-main-content p, blockquote {margin-bottom:1em;} The Focus HR team will be reaching out to all of our clients to go over these changes and how they may be impacted, but if you have any questions or concerns, please contact us. Note that if the employer had previously employed 11 or more persons at any point during the current or prior calendar year, the employer would have to pay the Large Employer rate throughout the current calendar year. As a result of the Colorado Overtime & Minimum Pay Standards Order, the minimum salary required to qualify for the executive/supervisor, administrative, and professional exemptions under state law increases to $865.38 per week on January 1, 2022. Many states have their own salary and duties tests for determining whether an employee is exempt from overtime under state rules. A new rate increase will be announced and be effective on July 1, 2022. If an employer (1) has a clearly communicated policy prohibiting improper deductions and including a complaint mechanism, (2) reimburses employees for any improper deductions, and (3) makes a good faith commitment to comply in the future, the employer will not lose the exemption for any employees unless the employer willfully violates the policy by continuing the improper deductions after receiving employee complaints. 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 $8.40 for smaller employers. 15. Deductions from pay are permissible when an exempt employee: is absent from work for one or more full days for personal reasons other than sickness or disability; for absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness; to offset amounts employees receive as jury or witness fees, or for military pay; for penalties imposed in good faith for infractions of safety rules of major significance; or for unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions. Please purchase a SHRM membership before saving bookmarks. Keep Informed . That means that employees need to be paid at those new rates effective January 1, 2022, irrespective of how busy things may have gotten in December. }); if($('.container-footer').length > 1){ Under the federal rule, any administrative, executive or professional employee who earns less than this becomes eligible for overtime pay, regardless of actual duties, beginning January 1, 2020. 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. m. On January 1, 2022, the minimum wage will increase to $14 per hour. Employers may want to consult legal counsel about how this rule may impact them. Being paid on a salary basis means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. To be classified as exempt from overtime under state law, administrative, professional, and executive employees must satisfy certain salary and duties tests and receive a salary that exceeds 3000 times the state minimum wage. Due to an increase in the state's minimum wage, the minimum salary required for the administrative, professional, and executive exemptions from overtime under state law will increase to $735.59 per week on January 1, 2022. While nearly every employer must pay the New York State minimum wage, there are some very specific exceptions, which only apply to certain employees or employees of public entities. Underpaying employees, or misclassifying them, because adjustments fell through the cracks during all of the end-of-year activities is likely to get very little sympathy from employees and just as little from the courts and from the state and local agencies that address wage-hour complaints. Worker Adjustment and Retraining Notification (WARN), Non-Profitmaking Institutions, Public Agencies, and Children's Camps (PDF). Gretchen Whitmer wants to raise Michigan's exempt salary threshold higher than the new federal rate of $35,568, which takes effect Jan. 1, but the rulemaking process may take a while. See other fact sheets in this series for more information on the exemptions for executive, administrative, professional, computer and outside sales employees. This change makes settlements harder to reach, McCutchen said. To determine whether the fee payment meets the minimum salary level requirement, the test is to consider the time worked on the job and determine whether the payment is at a rate that would amount to at least $684* per week if the employee worked 40 hours. .h1 {font-family:'Merriweather';font-weight:700;} 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. The content and links on www.NatLawReview.comare intended for general information purposes only. State: State: 2021 Minimum Wage: 2022 Minimum Wage: Arizona: $12.15: $12.80: California: $14 per hour . Learn how SHRM Certification can accelerate your career growth by earning a SHRM-CP or SHRM-SCP. 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;}'; 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). Computer professionals who are paid hourly have their own schedule of estimated increases. Find more information from the DOLs Wage and Hour Division,which includes exempt salary information on: This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel. The salary threshold will then automatically be reset every three years starting October 3, 2023 based on the 10th percentile of wages in the exempt occupations in Pennsylvania, utilizing a Pennsylvania-specific data set. (The state's salary threshold for the highly compensated employee (HCE) exemption is less than required under federal law.) The final rule is available at: https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and. 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. Colorado: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. The FLSA (Fair Labor Standards Act) employment law requires all employers to give eligible (or "non-exempt") workers at least the minimum wage for hours worked. With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, one of the thresholds multipliers will rise on Jan. 1, 2023. . Litigating a wide variety of employment-related claims, including discrimination, harassment, You are responsible for reading, understanding and agreeing to the National Law Review's (NLRs) and the National Law Forum LLC's Terms of Use and Privacy Policy before using the National Law Review website. Five states are increasing the minimum salary requirement for overtime exemption on January 1, 2022. Being paid on a "salary basis" means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The GovDocs Poster Store simplifies posting compliance for employers with less than 30 locations across all industries, offering a variety of posting products to meet your labor law compliance needs. 25 states are raising their minimum wage in 2022. But the state has two separate levels for large (26 or more employees) and small employers, as well as for workers in computer software. But thats not the case with new state or local wage-hour laws. Updated New York Salary Threshold. Contact the USDOL at (866) 487-2365 for more information. For employees in the Hospitality Industry, written notice must also be provided prior to any change in their hourly rates of pay. .usa-footer .grid-container {padding-left: 30px!important;} As a result of the Colorado Overtime & Minimum Pay Standards Order, the minimum salary required to qualify for the executive/supervisor, administrative, and professional exemptions under state law increases to $865.38 per week on January 1, 2022. No. The federal Fair Labor Standards Act (FLSA) requires most businesses to pay employees 1 1/2 times their regular rate of pay for all hours worked beyond 40 in a workweek unless they fall under an exemption. Salary Threshold as of December 31, 2021. Lastly, if computer professionals in Washington are paid on an hourly basis and meet the duties requirements, they must be paid at least $55.09 per hour to be considered exempt (3.5 times the states minimum wage). As mentioned above, to qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis. Gov. To qualify for the overtime exemption, licensed physicians and surgeons must earn at least $91.07 per hour. Members may download one copy of our sample forms and templates for your personal use within your organization. Each of the three white-collar exemptions has slightly different criteria: The same advocates who called for a $73,551 annual salary threshold for the white-collar exemptions described the current duties tests as "toothless" and demanded tighter duties tests, McCutchen said. And exempt salary thresholds are part of that complex matrix. The site is secure. Employers with fewer than 26 employees must pay a salary of at least $1,120 in 2022 to qualify for the exemption. "Given the current labor market, employers should also pay close attention to how much their competitors are offering to pay employees.". $58,240 (employers with 25 or fewer employees), $62,400 (employers with 26 or more employees), $64,480 (All employers regardless of size), $58,511 (NYC, Nassau, Suffolk, Westchester), $55,341 (12/31/2022 for All other NY Workers), ~$50,740 (1.75 x Minimum Wage, All Employers 2022), ~$57,293.60 (1.75 x Minimum Wage, Employers with 1-50 Employees). 1-888-273-3274. In Washington, employees must satisfy certain salary and duties tests to be classified as exempt from overtime under state law. The salary rates may vary depending on the city/county where an employee resides/works in California. Currently, the FLSA's salary threshold is $35,568, but some states have a higher cutoff for exempt workers. 2023 Exempt Status Salary Threshold by City and State. If the employee is paid an agreed sum for a single job, regardless of the time required for its completion, the employee will be considered to be paid on a fee basis. A fee payment is generally paid for a unique job, rather than for a series of jobs repeated a number of times and for which identical payments repeatedly are made. California, meanwhile, also stipulates that exempt employees must earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. There is no lower wage rate established for trainees or youth. ol{list-style-type: decimal;} The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Administrative, professional and computer employees may be paid on a fee basis rather than on a salary basis. In Washington, employees must satisfy certain salary and duties tests to be classified as exempt from overtime under state law. Monday, December 20, 2021 Before ringing in the New Year, employers should carefully evaluate whether they need to adjust their current practices to ensure that they remain compliant with state. If you would ike to contact us via email please click here. Colorados salary requirements for exemption status are: Its also worth noting that Colorados standard threshold will increase in 2024, with an indexed increase slated for 2025. Exempt employees do not need to be paid for any workweek in which they perform no work. tip-sharing provisions,as well. National Law Review, Volume XII, Number 3, Public Services, Infrastructure, Transportation. 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. And $16.20 per hour for the remainder of New York State, effective December 31, 2022. May 5, 2022 Under the Fair Labor Standards Act ("FLSA") employees must generally be paid at least federal minimum wage for all hours worked and overtime at a rate of one and a half times their "regular rate of pay" for all hours worked in excess of forty (40) hours in a workweek. Your session has expired. And $16.20 per hour for the remainder of New York State, effective December 31, 2022. Everyone raised their hands, but few attendees supported an increase of the salary threshold above $50,000 per year. Civil monetary penalties are available against employers, managers or supervisors who take tips earned by their employees. McCutchen alsonoted that the DOL is regularly recovering double damagesor liquidated damagesonce again, after the Trump administration limited their use to when an employer acted in bad faith or willfully. Salary threshold implementation schedule Salary thresholds for overtime exempt workers are a multiplier of state minimum wage for a 40-hour workweek 2023 Salary thresholds Small businesses: $1,101.80/week ($57,293.60 a year) Large businesses: $1,259.20/week ($65,478.40 a year) Remaining in effect for the duration of 2022 is a measure enacted in March 2021 . Each time the New York State minimum wage increases, the states minimum salary required for executive and administrative employees will increase proportionately. Most employees, regardless of their rate or method of payment, must be paid overtime after 40 hours of work per week. As a reminder, under the (FLSA), all employees must be paid at least minimum wage plus overtime for all hours worked. As a result, the minimum salary required for the executive, administrative, and professional exemptions from overtime under state law increases to $1,014.30 per week on January 1, 2022. McDonald said the pandemic has had more of an impact on state and local leave laws, such as expanded paid-sick-leave laws and covered reasons employees can take leave. 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. For the outside sales employee exemption, there is no minimum salary requirement. Due to an increase in the states minimum wage, the minimum salary required for the administrative, professional, and executive exemptions from overtime under state law will increase to $735.59 per week on January 1, 2022. McCutchen asked for a show of hands at the conference for who favored an increase in the salary threshold. Washington, DC 202101-866-4-US-WAGE1-866-487-9243, Administrator Interpretations, Opinion and Ruling Letters, Resources for State and Local Governments, https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and. DOL Is Seeking Liquidated Damages and Civil Penalties. Statement in compliance with Texas Rules of Professional Conduct. In 2021, the salary threshold for overtime was $684 a week, or $35,568 per year. The .gov means its official. An employer can change an employees rate of pay with advanced notice. The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. . In an April 2021 blog post, the DOL announced that it would seek liquidated damages to settle investigations prior to litigation. Yes. December is not the shortest month of the year, but it always seems to go by the fastest. "That's high," McCutchen noted. $1,125.00 per week ($58,500.00 per year) $("span.current-site").html("SHRM China "); Employers Should Review Their Pay Practices for the New Year, New OSHA Guidance Clarifies Return-to-Work Expectations, Trump Suspends New H-1B Visas Through 2020, Faking COVID-19 Illness Can Have Serious Consequences, Ontario: Paid Infectious Disease Emergency Leave Has Ended. } Some cities in California also have midyear changes scheduled. Workers who made less than that amount would have been eligible for overtime pay. Yes. Under the states exemption for highly technical computer employees, the employee may be paid by salary (at least $865.38 per week in 2022) or by the hour (under a state proposal, the minimum hourly rate would be $28.92 in 2022). else if(currentUrl.indexOf("/about-shrm/pages/shrm-mena.aspx") > -1) { The overtime salary threshold limits will increase for the following states: California To qualify for the overtime exemption, a computer software professionals must earn at least $50.00 per hour or $104,149.81 annually ($8,679.16 monthly). New York City's alary requirements for exempt employees is: $58,500 annually ($1,125 per week) That's also the threshold in Nassau, Suffolk, Westchester Counties, counties, N.Y. Many states have their own salary and duties tests for determining whether an employee is exempt from overtime under state rules. This blog provides practical information on the subject matter. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684 * per week. Beginning January 1, 2022, these employees must earn at least: In Colorado, employees must meet certain salary and duties tests to qualify for exemption. Employers with fewer than 26 employees must pay a salary of at least $1,120 in 2022 to qualify for the exemption. @media (max-width: 992px){.usa-js-mobile-nav--active, .usa-mobile_nav-active {overflow: auto!important;}} Flagstaff: $12.80 per hour: This is a $0.65 increase from the 2021 rate of $12.15 per hour. 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. 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. /*-->*/. Slowing the Spread of Litigation: An Update on First Circuit COVID-19 Has Your Business Attorney Met Your Estate Planning Attorney? The most commonly used exemptions are for administrative, executive and professional jobs, which are collectively called white-collar exemptions. While the Fair Labor Standards Act sets a federal threshold for salaried (exempt) employees, several states have their own regulations. For example, as of Jan. 1, 2022, the state overtime exempt salary threshold was determined by multiplying the current state minimum wage by 1.75. Five states are increasing the minimum salary requirement for overtime exemption on January 1, 2022. [SHRM members-only HR Q&A:What are the federal, state and local minimum wage rates?]. This includes the new salary threshold of $990 per week ($51,480 when annualized) in effect as of December 31, 2021. } Attorney Advertising Notice: Prior results do not guarantee a similar outcome. The tiered salary thresholds required for exempt status are also rising effective December 31, 2021. 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. For additional information, visit our Wage and Hour Division Website: http://www.dol.gov/agencies/whd and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243). For existing contracts, the rate rose to $11.25 per hour on Jan. 1. At the end of last year, more than 100 unions and advocacy groups called on the DOL to raise the salary threshold for exempt workers to $73,551 per year and to $82,745 annually by 2026. } Yes. USTR Releases 2023 Special 301 Report on Intellectual Property Washington Signs Into Law an Act for Consumer Health Data Privacy: Dont Look Twice, Its Alright The FCC Pulls Back the Curtain on Trending in Telehealth: April 18 24, 2023. $(document).ready(function () { To be classified as exempt from overtime under state law, administrative, professional, and executive employees must satisfy certain salary and duties tests and receive a salary that exceeds 3000 times the state minimum wage. Yes. The Department of Labor issued a final rule on Sep. 24, 2019 increasing the salary-level. Seattle: $17.27 per hour (up from $16.69) for employers with more than 500 employees and for employers with fewer than 500 employees that dont pay for benefits and $15.75 per hour for employers with 500 or fewer employees that pay tips and benefits (up from $15.00 per hour). If an employee is covered by both federal and state law but doesn't meet both sets of tests, employers should consult with counsel to determine how they should classify the employee in that particular situation. Employers may provide separate notices for each region, job site, job title and pay rate, or the employer may include a listing of all rates on a single employee pay notice. For example, the Massachusetts Emergency COVID-19 Paid Sick Leave Law was extended through April 2022. The U.S. Department of Labor outlines the categories and the tests that must be met under the federal FLSA. If the employer makes deductions from an employees predetermined salary, i.e., because of the operating requirements of the business, that employee is not paid on a salary basis. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available. document.head.append(temp_style); You may be trying to access this site from a secured browser on the server. Members can get help with HR questions via phone, chat or email. Yes. To qualify for exemption, employees generally must be paid at not less than $684* per week on a salary basis. 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. For example, a New York City employer who employed more than 10 employees at any time in 2016 who does not employ more than 10 persons throughout 2017 will be considered a Small Employer in 2018 as long as it continues to employ no more than 10 persons.
