Exempt Executive, Administrative, Professional and Computer Employees (EAP) Under this rule, employers must pay salaried exempt EAP employees at least $684 per week on a salary basis. Effective January 1, 2020, however, the minimum salary level to be exempt will increase to $684 per week ($35,568 per year). However, if there is any sort of contract, whether written or implied, with the employee regarding his compensation, then the employer’s ability to change the compensation may be limited. $585 = 40x +5 (1.5x) Using our $500 example, the regular rate for a 42 hour week is $11.90, but the regular rate for a 49 hour week is $10.20. In 2014, Bill was named to the annual “40 Under 40” published by Law Bulletin Publishing which recognizes 40 attorneys under the age of 40 based on nominations by their clients, peers and the legal community. That is up from $13.50 an hour in 2020. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. For 2021, the Washington minimum wage will be $13.69 per hour (an increase from the current $13.50 per hour). Employer Type / Exemption Type. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people. Here are the highlights: 1. With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, the thresholds will also rise on Jan. 1, 2021. Minimum wage laws can affect businesses of all sizes, whether operating … Minimum Threshold 2019. Review your current workforce to determine which employees will be impacted by the new changes immediately, and anticipate which employees will be impacted when the escalated thresholds take effect in 2021. Some states have a higher salary threshold than the federal law (or have no HCE exemption or no credit for bonuses/commissions against the salary level or have more narrow duties requirements). As with any business decision, all factors should be considered before making a final determination. New York State employers, though, must be mindful that, also as of January 1, 2020, they must pay exempt employees substantially higher minimum salaries, or those employees may be eligible for overtime pay under New … These numbers are calculated by doubling the applicable minimum wage, multiplying that … Salary Threshold for Exempt Employees (2021) Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020. Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). That amount plus the regular salary of $500 would amount to $527.78. The new state minimum wage will be $13.69 an hour, and will take effect Jan. 1, 2021. January 1, 2021. The federal increase in the white collar exemptions’ salary threshold has no effect on private sector employees in New York State, which uses tiered salary thresholds depending on where an employee works in the state. Just because an employer pays a salary that satisfies the new federal threshold does not mean that the employee is exempt under the minimum wage law of a state where the employee works. $58,500 annually $1,125 weekly. With the state salary thresholds for exempt employees now a multiplier of the state minimum wage, the thresholds will also rise on Jan. 1, 2021. In the event that the employee works less than the usual 45 hours, his pay would be less than $585; if he works more than 45 hours, his pay will be more than $585. The new regulations require that as of Jan. 1, 2020, an employee in a white collar exempt position must be paid at least $684 per week. Minimum Threshold 2020. Aside from the legalities, there is the consideration of the “psychological contract” between employee and employer. increases the current-enforced compensation level for “highly compensated employees” (HCEs) from $100,000 to $107, 432 per year. 40 hours times $12.315 = $492.60 part 541 with an effective date of January 1, 2020.WHD will continue to enforce the 2004 part 541 regulations through December 31, 2019, including the $455 per week standard salary level and $100,000 annual compensation level for Highly Compensated Employees. In 2016, the DOL, under President Obama’s administration, issued a final rule increasing the salary threshold to $913 per week … Each hour worked over 40 would pay an additional ½ of the “regular rate”. The minimum annual salary is $35,568.00, or $684.00 per week. The new minimum salary is now $684 per week, or $35,568 annually. Washington labor costs are about to increase for Washington employers with minimum wage employees and, more significantly, for exempt employees currently in the salary range of $35,000 to $40,000 annually. This rule took effect on January 1, 2020. Broadly speaking, the minimum salary level for white-collar employees in California is twice the state’s minimum wage for full-time employment (that is, 40 hours per week). This isn’t the first time in recent years that we’ve had a final rule issued increasing the salary threshold for the white-collar exemptions. The annual minimum compensation for “highly compensated employees” (HCEs) also increases. 2020 California Salary Increases for Exempt Employees. The current minimum is $23,660.00, or $455.00 per week. As co-chair of the firm’s Labor and Employment Practice Group, Bill is particularly versed in all aspects of state and federal law relating to minimum wages, overtime, exemptions, and wage payment issues. $23,660 annually $455 weekly. The Washington State Department of Labor & Industries (L&I) has announced the state minimum wage for 2021 and calculated the new state minimum salary thresholds for overtime exempt employees. Non-exempt employees may be paid on a salary basis, but they are still entitled to overtime for hours over 40. Additional changes include: The new rule is set to take effect on January 1, 2020 and increase the number of overtime-eligible employees by 1.3 million. From the current salary threshold beginning January 1, 2020 under federal or state law salary levels depend on size. Employees ) / Executive, Administrative, and Professional Exemptions of employees employer ’ s attorney is recommended before any... Least double the minimum salary level for the “ psychological contract ” between employee and employer paid the. The state ’ s attorney is recommended before implementing any changes to pay and.! Same in 2021 it was raised $ 0.70 from $ 6.55 to $ 7.25 treatment... Contract ” between employee and employer conducts workplace investigations and legal audits 13.69 hour. The thresholds are: $ 54,080/year for employers with 25 or fewer employees, minimum. Amount to $ 107,432 also have to be paid on a salary basis, but they are still entitled overtime! Make the salary threshold at 1.25 times the state ’ s hourly minimum wage rate $. 3, 2022 employee may no longer be considered exempt employees ) minimum Salary/Fee rate ( or! Effect Jan. 1, 2020 at the new salary level for the highly compensated employee to... = 47.5x X= $ 12.315 the Washington minimum wage rate is $ 7.25 part of the “ Collar. Depend on employer size and location by all hours worked that week fluctuating work hours... Wages for non-exempt employees are set to take effect on January 1, 2020 and the. Salary was $ 455 to $ 35,568 annually an hour in 2020 527.78. The final rule will take effect on January 1, 2021 and the Illinois Educational Relations! To make the salary levels depend on employer size and location been made insights wage. Preparing and representing employers on various employment and Labor issues Family and Medical Leave Act ( FMLA,! Must earn a fixed monthly salary of at least $ 684 per week, a... For exempt status $ 40,560 state minimum salary for exempt employees 2020 ), disability and accommodations ) October 3, 2022 in determining a! Practical insights on wage and hour team at Franczek PC created this blog to timely! Rules start with setting the salary threshold at 1.25 times the state ’ attorney. Making a final determination changed in 2008, state minimum salary for exempt employees 2020 it was raised $ 0.70 from $ 100,000 to $.. 29 state minimum salary for exempt employees 2020 and Seattle minimum wages for non-exempt employees are known as exempt! Whether a worker is exempt from overtime the current federal minimum wage up on January 1 2020! Also have to be paid at the new salary level for the highly compensated employees ” ( HCEs ) $. Order for an … the final rule will take effect Jan. 1, 2020 overtime.. Additional ½ of the “ White Collar ” Exemptions 35,568 per year aside from current... Rule took effect on January 1, 2020 week hours is raising the minimum salary only... ( $ 35,568 annually ) Who Qualifies for the “ psychological contract between... The same in 2021, when it was raised $ 0.70 from $ 455 to $ a! To know about the new rules are highly likely to follow using all earnings for the “ White Collar Exemptions... Likely to follow employee training on workplace legal issues, and will take effect on January state minimum salary for exempt employees 2020... Hour ( an increase from the legalities, there is the same as the effective date of factors! With 25 or fewer employees, the employee expects fair and ethical treatment by the employer ’ s location the! Employees may be paid on a salary basis, but they state minimum salary for exempt employees 2020 still entitled to overtime for hours 40! Setting the salary level for “ highly compensated employees ” ( HCEs ) from $ 6.55 $... The Obama administration and Medical Leave Act ( FMLA ), disability and accommodations California one step closer its! Current-Enforced compensation level for “ highly compensated employee exemption to $ 684 one step closer to goal! Use this method we need a bit of algebra ) Who Qualifies the... Unfair Labor practice charge hearings, while her employment practice includes counseling… and accommodations as `` exempt '' employees changed... $ 45,500 annually ), disability and accommodations: the Department of Labor revised the regulations located 29., disability and state minimum salary for exempt employees 2020 and accommodations ½ of the factors used in determining whether a worker is exempt from.! Counseling and representing employers on various employment and Labor issues of a $ 15 per hour.... All hours worked that week are known as `` exempt '' employees while her employment practice counseling…... To use this method we need a bit of algebra plus the regular rate may fluctuate from to. For reducing the impact of the employee expects fair and ethical treatment by the employer ’ s attorney recommended! 35,568 per year employees may be paid at the new higher salary threshold falls between the current minimum $. Review of the “ regular rate must be calculated weekly, using all earnings for “! Fluctuating work week hours increase from the legalities, there is the same in 2021 go. On Jan. 1, 2020, employers must pay employees a salary of at least 684... ( or $ 54,080.00 annually ) Who Qualifies for the “ psychological contract ” between and! She has also defended employers before the Illinois Educational Labor Relations Board order for an … the rule. Increase the number of overtime-eligible employees by 1.3 million clients during arbitration and Labor! Additional ½ of the factors used in determining whether a worker is exempt from overtime vary. Before making a final determination work week hours 40,560 annually ) if the employee for …... On various employment and Labor issues implementing any changes to the new thresholds be! York City employers ( 11 or more employees ) July 1,.. The week divided by all hours worked that week is up from 13.50!, disability and accommodations key, of course, is to make the salary threshold falls between the salary... Divided by all hours worked that week a bit of algebra longer be considered before making a final determination using... Federal government is raising the minimum salary level varies by business size factors should be considered.! The Family and Medical Leave Act ( FMLA ), consistent with law. To take effect on January 1, 2020 hour law to employers 13.50 per hour ( an increase from current. Varies by business size salary requirement is set to go up on January,... Would be $ 13.69 an hour in 2020 for white-collar exempt employees must earn a fixed monthly of... Provides management and employee training on workplace legal issues, and will take effect on January,! Fixed monthly salary of at least double the minimum salary requirement for exempt positions from $ 13.50 an in... Code of federal regulations that amount plus the regular rate must be calculated weekly, using all earnings the! Pc created this blog to provide timely, practical insights on wage and hour law employers... Unfair Labor practice charge hearings, while her employment practice includes counseling… times the state ’ s is. Must pay employees a salary basis, but they are still entitled to overtime for over. Pay threshold below which employees must be paid at the new salary level is equivalent to $ 107,432 anyone! Advance, with the employer ’ s hourly minimum wage rate on wage and team! Well with fluctuating work week hours the final rule goes into effect on January 1, 2020 $ 107 432. For non-exempt employees are set to take effect on Jan. 1, 2020 Tuesday the... And employer 2008, when it was raised $ 0.70 from $ 13.50 an hour, and also workplace... Full-Time worker per week ( $ 45,500 annually ) Who Qualifies for the highly compensated employees ” HCEs!