By this point you may be aware that December 1st is the effective date for the Department of Labor change in overtime rule. Which increases the annual salary threshold for exempt employees from $23,660 to $47,476, but have those employees met the Duties Tests?
Although it is a common misconception, meeting the salary threshold alone does not exempt an employee from overtime pay; they must also fulfill one of the exemptions in the standard duties test.
Earning a particular salary is one of three requirements that must be met under the “white collar exemptions”.
- Salary basis test: the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed
- Salary level test: the amount of salary paid must meet a minimum specified amount of $47,476 in 2017.
- Duties test: the employee’s job duties must primarily involve executive, administrative or professional duties as defined by the regulations.
If your employees meet the salary test, and one of the duties tests, they may very well be exempt. If you are unsure of how your employees would classify according to the duties test, give us a call at Niroc Consultants, where “We focus on your employees, so you can focus on your business.”