White House Seeks An Increase In The Minimum Guaranteed Salary Of Exempt Workers


By: Brad Adler

You may already know about the President's push to increase the federal minimum wage from $7.25 to $10.10, but it may come as a surprise that the White House is now seeking an increase for even exempt workers. Under the Fair Labor Standards Act, employees who are exempt under what are commonly known as the "white collar exemptions" must be paid at least $455/week to qualify for the exemption. If an employer pays the individual lower than that amount (which equates to $23,660/year), the employee does not qualify and is entitled to overtime for working more than 40 hours in a work week.

The White House has now indicated that it intends to request that the United States Department of Labor issue new regulations which increase the minimum salary guarantee. While the White House has not indicated the new amount it is seeking, some note that the weekly minimum salary would be $553 if it tracked inflation. And The Economic Policy Institute, a think tank, recently proposed raising it to $970 a week, or $50,440 a year, so that anyone earning less than that must be paid overtime.

It is noteworthy that any proposed increase would not take effect immediately. The Department of Labor would have to publish the new rule for comments and, then only after what is typically a very lengthy process, would it be able to issue a regulation setting a higher threshold. Of course, some states already require companies to pay a higher minimum guaranteed amount to certain exempt workers. California and New York, for instance, already require companies to pay certain exempt workers a higher weekly minimum salary and it is likely over the next few years that other states will attempt to pass state legislation increasing the weekly minimum.



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