ssional, or outside salesperson) and had a weekly salary of at least $455 ($23,660 annually). Effective December 1, 2016, the salary level will be increased to $913 per week/$47,476 per year. Employees who receive salaries less than that amount will no longer be considered exempt.
The new regulations also increase the salary level for “highly compensated employees” (“HCEs”). Currently at a salary level of $100,000 annually, HCEs must be compensated at the minimum salary level of $134,000 effective December 1, 2016. The analysis of an HCE’s duties is subject to a “streamlined test” (meaning the actual duties performed are less scrutinized than for non-HCEs).
The regulations allow nondiscretionary quarterly bonuses and incentive payments to satisfy up to 10% of the new salary test for non-HCEs. Employers may include commissions, nondiscretionary bonuses and deferred compensation for up to two-thirds of an HCE’s compensation.
The salary requirements will be adjusted every three years beginning January 1, 2020 based on an analysis of salaries being paid nationally.
Employers are advised to analyze their salaried employees’ salaries carefully if they want to preserve the employees’ status as exempt employees (not subject to overtime payments after 40 hours in a workweek).
Please consult Don Smith at email@example.com for additional information and specific advice.
© Riley Bennett Egloff LLP
Disclaimer: Article is made available for educational purposes only and is not intended as legal advice. If you have questions about any matters in this article, please contact the author directly.
Permissions: You are permitted to reproduce this material in any format, provided that you do not alter the content in any way and do not charge a fee beyond the cost of reproduction. Please include the following statement on any distributed copy: “By Donald S. Smith © Riley Bennett Egloff LLP - Indianapolis, Indiana. www.rbelaw.com”