Management Update

Volume 8, Issue 10

October 2019

Eugene Scalia Confirmed as Secretary of Labor

Last week, the Senate confirmed Eugene Scalia as the new Secretary of Labor, replacing Alexander Acosta. Acosta resigned in July because of his role in a Jeffrey Epstein federal plea deal.

Eugene Scalia is the son of Antonin Scalia, the late Supreme Court Justice. He has been a partner in a large corporate defense firm. He served Solicitor General for the U.S. Department of Labor in the late 2000s during President George W. Bush's administration.

The confirmation vote for Mr. Scalia was 53-44. No Democrats voted for him.

DOL Issues New Rule Regarding Minimum Salary Level for White Collar and HCE Overtime Exemptions

Beginning on January 1, 2020, employers must pay certain employees higher minimum salaries to keep them within a “white collar” or “highly compensated employee” (HCE) exemption to the federal overtime pay requirement.

Below, you'll find a chart comparing the current status of the law to the new Final

Rule.

To Qualify for White Collar Exemption

Current Law:

Final Rule Effective 01/01/2020

Employee paid on salary basis

Same

Employee primarily performs executive, administrative or professional duties

Same

Employee paid at least $455 per week ($23,660) annually

Employee paid at least $684 per week ($35,568 annually)

To Qualify for Highly Compensated Employee Exemption

Current Law:

Final Rule Effective 01/01/2020

Employee paid at least White Collar Exemption amount on salary basis (does not include nondiscretionary bonuses and incentive payments)

Same, but note that the salary amount increased under Final Rule

Employee's primary duty includes office or non-manual work

Same

Employee customarily and regularly performs at least one of the exempt duties of an exempt executive, administrative or professional employee

Same

Employee paid at least total compensation $100,000 annually

Employee paid at least total compensation of $107,432 annually (including minimum of $684 per week)

Under the new Final Rule, employers will be permitted to use nondiscretionary compensation (e.g. bonuses and commissions) to satisfy up to 10% of the White Collar Exemption salary level, which can be paid on an annual or more frequent basis.

Employers will also be permitted to make one “catch-up” payment within one pay period after the end of each 52-week period to bring the employee’s compensation up to the required salary level. This “catch-up” payment may equal up to 10% of the required salary level.

The new law does not automatically update the minimum required salary levels, but the Department of Labor (DOL) anticipates updating the salary levels every four years through the regular notice-and-comment rulemaking.