DOL issues final rule updating regulations regarding white collar employees

The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) issued a final rule making significant changes to the Fair Labor Standards Act (FLSA) regulations regarding the minimum salary threshold for white-collar exemptions. The significant changes include (1) increasing the minimum salary threshold for white-collar exempt employees, (2) increasing the highly compensated employee (HCE) total annual compensation threshold, and (3) implementing an automatic update to the earnings thresholds every three years. What does this mean for employers?

Background

The FLSA requires covered employers to pay employees minimum wage and overtime pay, when applicable, to its employees unless exempted. Section 13(a)(1) of the FLSA exempts from the minimum wage and overtime pay requirements any employee employed in a bona fide executive, administrative, or professional (EAP) capacity whose duties and compensation meet certain requirements. These exemptions are commonly referred to as the “white-collar” exemptions.

For an employee to be classified as exempt under FLSA’s EAP exemptions, the employer must generally show: