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HR Snapshot: Minimum salary for exempt employees isn’t dead yet

February 19, 2019 at 2:42 pm

Managers may still see a mandatory increase in pay if Labor Department implements expected changes in March.

As you may recall, a new minimum salary for exempt employees almost took effect in December of 2016. The minimum salary of $23,660 per year was set to increase to $47,476 per year, but a last-minute ruling from a federal judge put that all on hold. But that could all change next month, according to the latest HR Snapshot.

While the Department of Labor (DOL) would likely have fought for their new rule under a Democratic administration, the Trump administration took over just a few months later, and the new rule was effectively laid to rest. Due to the nature of the court system, however, the earlier increase isn’t completely dead. If the DOL does not create another new rule before Trump leaves office, the $47,476 minimum could come roaring back to life.

Knowing that the 2016 rule could rise again and that $23,660 (set in 2004) is no longer a reasonable number, the DOL under President Trump has been taking steps – albeit slow ones – to come up with a less drastic rule. Pre-rulemaking has been underway for a year and half, and in March we expect to see the actual proposed rule published for public comment.

Given the rate of inflation since 2004 and the number the current Secretary of Labor suggested during his confirmation hearings, we anticipate that the proposed rule will include a minimum salary for exempt employees between $30,000 and $35,000 annually. If a new rule is made, it’s unlikely that it would take effect before spring of 2020, and employers will almost certainly have at least six months’ notice to make the necessary changes.

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