Just before Labor Day, the federal department of labor issued a proposed rule that would increase the salary threshold for classifying an employee as exempt from the overtime requirements of the Fair Labor Standards Act. The proposed rule is still subject to a comment period before it is adopted. 

Under the Fair Labor Standards Act, all employees are entitled to be paid 1.5x their hourly rate (overtime pay) for hours over 40 in a work week. 

However, some employees are exempt from the overtime requirements of the FLSA. Some, but not all, exemptions require an employee to be paid a minimum salary before they can be considered exempt. For example, under the current FLSA regulations, employees subject to "white collar" exemptions (such as managers who fall under the "executive" exemption) must be paid a minimum salary level of $684 per week, or $35,568 per year. The DOL's new rule proposes that the minimum salary will be increased to $1,059 per week, which is $55,068 per year. The employee's work would also need to fit certain "duties" standards that are not being changed with the new proposed rule. 

If an employee is paid less than the minimum required salary, then the employee cannot be considered exempt. As a result, an employee who is called a manager may be entitled to overtime pay. Even if the employer classifies them as exempt. 

One note: New York's minimum salary requirement is already significantly higher than the federal minimum salary requirement for exemption. As of the date of this posting (September, 2023), the minimum salary requirement for exemption is $1,125 per week for all New York City, Long Island and Westchester employers, and $1,064.25 per week for employers in the rest of New York State. 

If you believe that you have been misclassified as exempt, and have been denied overtime pay as a result, contact us at 917-810-4303 for a free, confidential case assessment.