The new regulations include the following noteworthy changes, among others. Under the new regulations:

• An employee cannot be considered exempt under the administrative, executive or professional exemptions unless his/her salary is at least $455/week (or $23,600/year), a huge increase from the old regulations and a small increase from the proposed regulations;
• Under a new Highly Compensated Employee exemption, an employee making at least $100,000 annually need only perform one (rather than all) of the job duties requirements under the administrative, professional or executive exemptions in order to be deemed exempt; and
• The job duties tests for each of the administrative, executive and professional exemptions have changed. Of particular interest among these changed job duties are:
  • the addition to the executive exemption of the requirement that the employee have authority to hire or fire other employees (or recommend such actions and have those recommendations be given particular weight);
  • the retention of the requirement that to qualify for the administrative exemption, employees exercise discretion and independent judgment (a requirement that was included in the old regulations but was not included in the proposed regulations); and
  • the removal of the requirement from the old regulations that, in order to be eligible for the professional exemption, an employee must exercise discretion and independent judgment.

The new regulations are set to take effect in 120 days; however, it remains possible that Congress will take action to reject the regulations. Also, under the recent amendments to the Illinois Minimum Wage Law, Illinois employers will still be bound by the old regulations to the extent the old regulations would make an employee eligible for overtime.

A full description of the new regulations is included on the DOL’s new FairPay website, which can be found at http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm. In addition, we will continue to provide you with information regarding the new regulations and their status.