The FLSA's minimum salary requirement is set to remain the same to start 2023, but the Department of Labor is expected to publish a proposed rule that could increase the minimum salary requirement, so watch for developments. As of January 1, 2023, California employers must compensate their computer professionalexempt from paying them overtime. Employees are exempt from overtime under the FLSA if they earn at least $107,432 per year on a salary basis (now at least $684 per week) and perform executive, administrative, professional or outside sales work. These effective minimum hourly rates apply to nonexempt employees regardless of whether these workers are paid an hourly wage or a weekly salary. Suggest a topic and we might discuss it in a future blog post. For further information, contact your Fisher Phillips attorney, the authors of this Insight, or any attorney in ourWage and Hour Practice Group. White House Reviewing Proposed Regulations on Reinstated Superfund You Dont Need a Machine to Predict What the FTC Might Do About Is It Compensable? But now that the midterm elections are over, we expect the DOL to move swiftly to update the overtime regulations. to have accounted for almost 60 percent of the State's minimum wage workforce. Heres what we know about these rate increases: Statewide minimum wage: The statewide minimum wage rate for nonexempt (overtime-eligible) workers will rise to $15.74 per hour (up from $14.49), effective January 1, 2023. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Kara Craig, L&Is salary implementation threshold schedule, State Laws on the White Collar Exemption from Overtime, ADA: Reasonable Accommodation and the Interactive Process, Vigilant Member Hiring & Retention Survey, $18.69 per hour (up from $17.27 per hour) for large employers (more than 500 employees worldwide); or, $18.69 per hour for smaller employers (500 or fewer employees) who dont pay at least $2.19 per hour toward an employees medical benefits and/or if the employee doesnt earn at least that much per hour in tips; or. PLUS TIPS "Tipped Employees" includes any employee who engages in an occupation in which he/she customarily and regularly receives . Before classifying and treating any employee as exempt from overtime, employers should confirm that the employee satisfies all applicable tests for overtime exemption under federal and state laws. Challenges to the No Surprises Act Continue: The Latest includes a Navigating Permissive State Laws in Light of the Federal Information FDA Publishes List of 2023 Priority Guidance Topics. White House Reviewing Proposed Regulations on Reinstated Superfund You Dont Need a Machine to Predict What the FTC Might Do About Is It Compensable? For example, the minimum wage for employees working for fast-food chains is $15 an hour. Litigation Setback for Employers Under Illinois Biometric Information Senate Committee Holds Hearing on Future of Low Carbon Transportation North Carolina Senate Passes Compassionate Care Act at Exactly 4:20 States and Feds Signal Big Changes to Telehealth Prescribing. This Week in 340B: February 21 27, 2023. On 22 February 2023, the U.S. Supreme Court ruled that a high-earning professional must be paid on a salary basis to be exempt from overtime rules. Good News for American Businesses: H1-B Denial Rates Plummet Under USCIS Extends Comment Period for Proposed Fee Increases, OFCCP Rescinds Trump-Era Religious Exemption Rule. Salary-level test. Minimum wage rates differ based on industry and region. Watch future newsletters for an update on the increased rate for 2023. Abusive Arbitrage Devices Its Time to Get Reacquainted (Episode 2 How Modern Manufacturing Plants Can Protect Against Ransomware, Cyberattacks, FTC Will Host May 23, 2023, Workshop on Recyclable Claims and the Green Guides. The fluctuation was an indication that Hewitt was not truly compensated on a salary basis.Helixunderscores the importance of seemingly technical requirements of FLSAs white-collar exemptions. supervises two (2) or more employees; MI Regs. Creditor Stung By Academy Of Motion Picture Arts And Sciences Bylaws. At present in 2022, the minimum wage is $15.00 per hour for employers with 25 or more workers and $14.00 per hour for employers with fewer than 25 workers. Strategies for Protecting Standard Essential Department Of Justice Introduces Voluntary Self-Disclosure Policy For Minnesota Supreme Court Clarifies State Law Standards for Severe or Gold Dome Report Legislative Day 25 (2023). Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organizations culture, industry, and practices. You should also keep the following compliance tips in mind when reviewing exempt and non-exempt status under the FLSA: We will monitor developments from the DOLs Wage and Hour Division, so make sure you are subscribed toFisher Phillips Insight Systemto get the most up-to-date information. This rate is subject to mandatory annual adjustments which are usually announced in October or early November. Employers not subject to the minimum wage law can pay employees wages of their choosing. For 2023, the wage for that younger group will be $13.38 per hour. As a result of labor shortages, inflation increases and other issues, employers will also likely be subject to renewed demands for wage increases from new and existing employees substantially above those minimums. In Washington, employees must satisfy certain salary and duties tests to be classified as exempt from overtime under state law. Six states increased the minimum salary requirement for overtime exemption on January 1, 2023. Here are some key things to know for both federal exemptions and state exemptions, along with some state-specific changes for 2023. This compares with 1.1 percent for the Long Island-Westchester area and a decline of 0.4 percent for Upstate. Desperate Times, Desperate Measuring Cups FTC Brings Enforcement Trending in Telehealth: February 20 26, 2023, IRS Sets Deadline For Using 401(K) Plan Forfeitures, How Generative AI Generates Legal Issues in the Games Industry, DOJ Announces New Nationwide Voluntary Self-Disclosure Policy. The state minimum wage applies to workers age 16 and older. Effective July 24, 2009, the federal minimum wage is $7.25 per hour. $28.38 per hour in 2021, and adjusting annually therefore by CPI. The decision serves as a reminder to employers to fully comply with the FLSA regulations, including paying exempt employees a predetermined salary. temp_style.textContent = '.ms-rtestate-field > p:first-child.is-empty.d-none, .ms-rtestate-field > .fltter .is-empty.d-none, .ZWSC-cleaned.is-empty.d-none {display:block !important;}'; Employers should review their pay practices to ensure that they are paying high-earning professionals a true salary that is a steady stream of pay.5, Penny Chen is an associate at the firms Los Angeles office. The New York City Council Sets its Sights on Non-Profit Housing DOJ Announces New Voluntary Self-Disclosure Policy for U.S. Attorney Supreme Court: Salary, Not Daily Pay, Required for FLSA Overtime Time Is Money: A Quick Wage-Hour Tip on the Tip Credit, EDPB issues its Opinion on the EU-U.S. Data Privacy Framework, Hunton Andrews Kurths Privacy and Cybersecurity. NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. If you raise an employees pay to maintain the exempt status, are you willing to keep them in the same bonus program? Section 7 sets the minimum service rate for tipped employees at $6.75 in 2023. : Advanced Marketing Compels Trial on Arbitration in a TCPA Health Plans Gag Clause Attestations Due December 31, 2023. Exempt computer professionals: The minimum salary rate for exempt computer professionals who are paid hourly will also increase as of January 1, 2023. Nota Bene Episode 160: European Update: Oliver Heinisch and Scott Federal Communications Commission to Consider Rules and Proposals to Whats the Standard? The salary basis requirement is met solely when employees are paid by the week or longer, the high court found. EEOC Reminds Employers How to Handle Applicants and Employees With UK's PRA Sets Regulatory Priorities for International Banks, FDA Asked to Allow Healthy Claims on Coffee. ADVANCED! document.head.append(temp_style); You may be trying to access this site from a secured browser on the server. Performance Rule Requires Disclosure of Relationship Tech Takeaways: SCOTUS Weighs in on Pivotal Tech Cases. The minimum salary amounts for the "white collar" exemptions (administrative, executive, and professional) are two times the State's minimum wage. if(currentUrl.indexOf("/about-shrm/pages/shrm-china.aspx") > -1) { Creative professionals must primarily do work that requires invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. In light of COVID-19, Jin has counseled clients on employment policies pertaining You are responsible for reading, understanding and agreeing to the National Law Review's (NLRs) and the National Law Forum LLC's Terms of Use and Privacy Policy before using the National Law Review website. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. Many employers learned when the salary threshold was increased last time that making these changes is not as simple as it may appear. An exception is small employers can instead pay a minimum wage of $16.50 per hour if they contribute at least $2.19 per hour toward employee medical benefits and/or the employee earns at least $2.19 per hour in reported . The FLSA allows forexemptionsfrom these overtime and minimum wage requirements for certain employees. Hewitt initiated a lawsuit against Helix in the Southern District of Texas, seeking overtime pay under the FLSA. Recent FTC Enforcement Action Merits Cyber Insurance Coverage Review, Two Ways to Redefine & Achieve CRM Success. This is true for certain exemptions in other states as well (ex. Additionally, worker advocacy groups have called on the DOL to raise the threshold substantially higher than what was proposed during the Obama administration. Again, they want more people to be eligible for overtime. Tips: The minimum wage rates in both Seattle and SeaTac continue to be higher than the statewide rate in Washington. To be considered an administrative employee, the person must perform office or nonmanual work directly related to management or general business operations. In a 63 decision forHelix Energy Solutions Group v. Hewitt,1the Supreme Court held that a high-earning professional is not properly classified as a highly compensated employee exempt from the FLSAs overtime pay guarantee when they are paid a daily rather than fixed weekly rate. Thereafter, the Trump administration raised the rate less substantially from $455 to the current $684 a week. In 2016, California passed a law to raise the minimum wage to $15.00 per hour statewide by 2022 for large businesses with 26 or more employees, and by 2023 for small businesses with 25 or fewer employees. are registered trademarks of ADP, LLC. This is greater than the Federal Minimum Wage of $7.25. The Final CCPA Regulations: What You Need To Know, Are College Athletes Students or Employees? } The specific minimum wage requirements for 2023, shown on the citys minimum wage webpage, will be: Employers are required to provide a written notice to each employee working in Seattle before any change in their wage rate or other terms of employment. Brooke C. Bahlinger is an associate and litigation lawyer with Foley Gardere in Dallas. IT'S HAPPENING! $("span.current-site").html("SHRM MENA "); Helix paid Hewitt on a daily-rate basisranging from US$963 to US$1,341 per daywith no overtime compensation. "Employers sometimes think that if an employee earns a lot of money, that that is sufficient to treat the person as exempt and not pay overtime. Employers engaged in retail or service businesses whose annual gross income is less than $500,000 are not required to pay the state minimum wage rate. Creditor Stung By Academy Of Motion Picture Arts And Sciences Bylaws. Anyone not paid at least $780 per week will not qualify for the white-collar exemptions and will therefore be treated as a non-exempt (hourly) employee, who must . IT'S HAPPENING! Do Issuers Fail To File Form Ds Because They Fear Trolls? } In Helix Energy Solutions Group v. 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