The Department of Labor has been debating whether to change how it currently defines exempt vs. non-exempt employees. In general, non-exempt employees work for an hourly wage, while exempt employees work for an annual salary. As an exempt employee, you are prohibited from earning overtime pay--time-and-a-half pay for working more than 40 hours in a week.
The Current Rules
There are three main criteria used to determine whether an employee is exempt (though there are some exceptions):
- The employee earns at least $26,660 per year.
- The employee is salaried.
- The employee carries out "exempt" job duties-- high-level duties falling under ones of these categories:
In Obama's final months in office, he attempted to pass a rule that would have doubled the salary threshold (the first criterion listed above) to more than $47,000, which would classify almost any employee earning less than this amount as "non-exempt". Had it gone into effect, this rule would have made millions more Americans eligible for overtime pay.
However, this rule was blocked after being challenged by the U.S. Chamber of Commerce, business groups and some states. Under the Trump administration, the Department of Labor has begun work on setting a new threshold--which is expected to be lower than the one proposed by the Obama administration.
The Department of Labor has issued a Request for Information, in which is seeks public comment on Obama's proposed threshold change. In the RFI, you can provide your opinion on 12 different subjects, including how salary thresholds should be set, whether the above criteria should be used in determining exempt status as well as the impacts of any changes in overtime law on individual regions and industries. You can submit your comments electronically or by mail.