One of the more common Wage and Hour violations that Small Business faces is that of “Employee Mis-Classification”. This occurs when an employee is treated as exempt from overtime when they are really not. Most of the time it happens with administrative personnel that are salaried but should still be subject to overtime.

In order to be exempt, an employee has to pass BOTH of two tests. The first is that they get paid a salary that is at least $684 per week or $35,568 per year. The second is that they must fit in one of the “duties tests” for one of the exemptions. We’ve written about this before but Wage and Hour Division (WHD) has a number of fact sheets for more information.

The WHD has recently announced a proposed rule that would raise the minimum salary from $35,568 to $55,000 ($1059 per week) and it provides for a mechanism to adjust that minimum salary every 3 years.

One other change for “Highly Compensated Employees” (Basically no “duties test”) the proposal raises the minimum from $107,432 to $143,988. The comment period will be open until November 7. No proposed implementation date as yet but it will likely be soon after a final rule is published.