Final Overtime Exemption Rule Released by DOL
As we have previously shared, the Department of Labor has issued its dramatic overhaul of the criteria for exemption under the Fair Labor Standards Act (FLSA). As a “refresher”, the status of exemption requires meeting three criteria:
Salary Basis Test: the person must be paid a set amount for a set period of time, regardless of the amount of work performed (or even the quality, which is a different issue).
Salary Level Test: The regular salary must be at or above a specified minimum. If this is different between the federal minimum and an applicable state minimum, the higher rate prevails.
Duties Test: The person must perform executive, administrative [involving responsibilities and duties that require more than just basic training], and professional.
Criterion #2, which is the one being changed by the DOL, was last updated in 2019. Ironically, that increase is still being challenged in court, as the current increase is sure to be. The previous (and probable current) challenges are made to the authority of the DOL to impose such increases unilaterally, as opposed just to the changes themselves.