As reflected in the charts below, minimum wages increased in dozens of states and localities when the new year rang in on January 1, 2022 and exempt salary thresholds also increased in some states effective January 1, 2022. Workers who made less than that amount would have been eligible for overtime pay. As a result, the minimum salary required for the executive and administrative exemptions will increase on December 31, 2021 as follows: Note: There is also a professional exemption under state law. In addition to soon issuing a new proposed overtime rule, the DOL is going after the misclassification of workers as independent contractors, particularly in the home care industry, McCutchen said. The federal Fair Labor Standards Act (FLSA) requires that employers pay most employees at least the federal minimum wage for each hour worked as well as overtime pay for all hours worked in excess of 40 in a workweek. } The US Department of Labor issued a final ruling on the new salary threshold for salary exemption: $684 per week (equivalent to $35,568 per year). How high might it go? $('.container-footer').first().hide(); Remaining in effect for the duration of 2022 is a measure enacted in March 2021 . New York States salary threshold is usually higher than the federal threshold, and that will remain the case if the federal courts continue to block the planned federal increases. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684 * per week. . If that amount were adjusted for inflation, it would nowbe $56,836 annually, McCutchen noted. New Antidumping and Countervailing Duty Petition on Non-Refillable Steel Cylinders I-9 Verification and Compliance: Navigating New Nuances Post-COVID, Foreign Sponsors Breaking Into The Us Renewables Market: Challenges And Solutions, Labor and Employment Update for Employers May 2023, Global Mobility Opportunities And Challenges: How To Navigate A Global Workforce. Note: In Colorado, an exempt employees salary generally must also be sufficient to satisfy the minimum wage for all hours worked in a workweek. Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. COVID-19 Vaccination Leave Continues in 2022. California, meanwhile, also stipulates that exempt employees must earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. /*-->*/. United States: SEC Staff Finds Safeguarding Policies and Procedures Value Billing and Its Importance for Law Firms, SEC Steps up Oversight of Crypto Exchanges. } The state's minimum wage for 2023 is $15.74 an hour. Although the federal rate remains $7.25 for now, the Department of Labor recently issued new minimum wage rates for employees who perform work in connection with federal contracts. Your session has expired. To ensure your organization is aware of the latest minimum wage requirements, please check out our breakdown by state and locality. $62,400 for employers with 26 or more employees; (1) $45,000 ($865.38/week) an exempt executive, administrative, or professional employee; $58,500 ($1,125/week) for employers in New York City. See other fact sheets in this series for more information on the exemptions for executive, administrative, professional, computer and outside sales employees. var temp_style = document.createElement('style'); The beginning of the year is a good time for employers to audit their pay practices for compliance with federal, state and local wage and hour laws. $58,240 (employers with 25 or fewer employees), $62,400 (employers with 26 or more employees), $64,480 (All employers regardless of size), $58,511 (NYC, Nassau, Suffolk, Westchester), $55,341 (12/31/2022 for All other NY Workers), ~$50,740 (1.75 x Minimum Wage, All Employers 2022), ~$57,293.60 (1.75 x Minimum Wage, Employers with 1-50 Employees). Find the latest news and members-only resources that can help employers navigate in an uncertain economy. To determine whether the fee payment meets the minimum salary level requirement, the test is to consider the time worked on the job and determine whether the payment is at a rate that would amount to at least $684* per week if the employee worked 40 hours. On December 31, 2021, the minimum wage is increasing in every region except New York City. Additionally, rates may vary based on geographic location, employer size or industry, "so be sure to check state and local laws where you operate to ensure that you're following the applicable minimum wage," Whitman said. The state's minimum wage is scheduled to increase on January 1, 2022. With the calendar turning to 2022, workers in over two dozen states and localities could see a pay increase as a result of legislation raising applicable minimum wage or exempt salary thresholds. Virtual & Las Vegas | June 11-14, 2023. . Additionally, if after the 52-week period, the employer has not met its financial obligation, the employer can make a final catch-up payment within one pay period after the end of the 52-week period to bring an employees compensation up to the required level. Five states are increasing the minimum salary requirement for overtime exemption on January 1, 2022. State: State: 2021 Minimum Wage: 2022 Minimum Wage: Arizona: $12.15: $12.80: California: $14 per hour . However, no exemption from the state's minimum wage is available. In an April 2021 blog post, the DOL announced that it would seek liquidated damages to settle investigations prior to litigation. As mentioned above, to qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis. The .gov means its official. That means that employees need to be paid at those new rates effective January 1, 2022, irrespective of how busy things may have gotten in December. The Obama administration's 2016 overtime rule, which a 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. For information about minimum wage exclusions, see our. McDonald noted that the current number of states that have a higher minimum salary threshold than the federal level is still small. Also, an employer is not required to pay the full salary in the initial or terminal week of employment, or for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act. State DOL Website 2022 Salary Threshold 2023 Change *Effective 1/1/2023 Last Updated Alabama Visit Here $35,568 (Current Federal) N/A 7/24/2009 Alaska Visit Here $43,014.40 $45,136 And with holidays and vacations, not to mention employees working remotely, its not unusual for matters to be put off until the new year or for a project or two to fall through the cracks. These exemptions are often called the white-collar or EAP exemptions. The GovDocs software platform integrates three solutions in one convenient place to help you master the employment laws impacting your business. Under law and regulation, employers have always been required to keep true and accurate records of employees weekly hours worked, rates paid, and wages earned for hours worked. McCutchen predicted that if the DOL increasesthe salary threshold to $50,000 or above, "there will be litigation all over again by employer interest groups.". The regular rate is determined by dividing gross earnings by the hours worked. She noted that six 90-minute meetings have been scheduled with stakeholders from March 8 to April 6: three meetings with unions and worker advocates, plusthree more with industry groups, including one with SHRM. .cd-main-content p, blockquote {margin-bottom:1em;} Employers seeking to classify employees as exempt from overtime should ensure employees meet both federal and state exemption criteria. Remainder of New York State For other places in New York State, effective Dec. 31, 2022, it's: $55,341 annually ($1,064.25 per week) Washington $(document).ready(function () { While the primary goal of the rule is to update the minimum salary-level requirement for white-collar exemptions, changes to the duties tests also will be considered, said McCutchen, who is astrategic advisor for New York City-based ComplianceHR. This year, employers should pay particular attention to minimum wage changes, higher salary requirements for exempt workers and COVID-19-related paid leave. 2023: $54,132 2024: $62,920.L&I is using a multiplier of the state minimum wage to determine the minimum salary threshold.2. Under the federal rule, any administrative, executive or professional employee who earns less than this becomes eligible for overtime pay, regardless of actual duties, beginning January 1, 2020. Please confirm that you want to proceed with deleting bookmark. If an employer (1) has a clearly communicated policy prohibiting improper deductions and including a complaint mechanism, (2) reimburses employees for any improper deductions, and (3) makes a good faith commitment to comply in the future, the employer will not lose the exemption for any employees unless the employer willfully violates the policy by continuing the improper deductions after receiving employee complaints. In Washington, employees must satisfy certain salary and duties tests to be classified as exempt from overtime under state law. The Focus HR team will be reaching out to all of our clients to go over these changes and how they may be impacted, but if you have any questions or concerns, please contact us. In such cases, employers who are subject to state overtime requirements must pay overtime at time and a half. $14 per hourfor employers with26 or more employees; $15 per hour for employers with 26 or more employees; $9.87 (unless the states unemployment rate for 2021 exceeded 8.5%, in which case the current $9.65 rate will remain in effect for 2022), $9.30 (for employers with annual gross receipts of $342k per year; otherwise, the federal minimum wage applies), $15.00, or $2 above state minimum wage, whichever is greater, $15.50 or $2 above the state minimum wage, whichever is greater, $14.00 (increasing to$15.00 by Dec. 31, 2021). In general, employers who are covered by both state and federal laws must pay employees the higher rate, whether it is the minimum wage or the weekly minimum salary. Pennsylvania Medical Supply Company Agrees to $5 Million Settlement.

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