Currently under the Fair Labor Standards Act (“FLSA”), the annual salary-level threshold for an employee to maintain a “White-Collar” exemption (e.g. Executive, Administrative, Professional, etc.) to overtime is $35,568 - or $684 per week. The FLSA’s new proposal raises the salary threshold to $55,068 ($1,059 per week) for White-Collar exemptions to overtime, including automatic increases every three years due to inflation. With nearly 3.6 million U.S. employees being impacted by this proposed salary increase, it is inevitable that Idaho businesses will also be impacted.
The main goal of the proposed rule is to provide protections for salaried workers by ensuring that employees are fairly paid for their work. Lower-paid salaried employees could be subject to long working hours without an opportunity for overtime pay. Therefore, an increase to the annual salary-level threshold is intended to restore and ensure fair overtime pay for salaried workers who work more than 40 hours during the work week.
The proposed changes are not yet in effect and employers and businesses may submit input on them on or before November 7, 2023. Meanwhile, there are important considerations that Idaho businesses should be thinking about now in preparation for the proposed changes going into effect.
Employers should consider:
- Whether certain employees in certain positions will no longer be exempt and will need to be reclassified into a time tracking role.
- Communications that may need to accompany this shift, as employees may be concerned about the negative stigma that could accompany a reclassification to non-exempt status.
- Whether it makes sense to increase the salary of certain employees to avoid such a reclassification and related budget concerns.
- Documentation issues that will accompany any such reclassifications, including the need to update job descriptions.
If you have any questions or need help – reach out, we are here to help! Contact IEL at 208-901-3912 or email us at [email protected].