Condo Media - December 2016 - 43

Both the Federal and Massachusetts
statutes provide for exemptions to the
above overtime mandates. To qualify for
exemption, employees generally must
meet certain tests regarding their job duties and be paid on a salary basis (i.e., as of
Dec. 1, 2016, at a rate of not less than $913
per week). In order for an exemption to
apply, an employee's specific job duties
and salary must meet all the requirements of the regulations. According to the
Department of Labor's fact sheet on this
issue, the following tests must be met for
each type of white collar employee to be
entitled to the exemption:
EXECUTIVE EXEMPTION
n The employee must be compensated
on a salary basis (currently at a rate not
less than $455 per week-as of Dec. 1,
2016, at a rate of not less than $913 per
week)
n The employee's primary duty must be

managing the enterprise, or managing a
customarily recognized department or
subdivision of the enterprise

n The employee must customarily and

regularly direct the work of at least two
or more other full-time employees or
their equivalent

n The employee must have the authority

to hire or fire other employees, or the
employee's suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of
status of other employees must be given
particular weight

ADMINISTRATIVE EXEMPTIONS
n The employee must be compensated
on a salary basis (currently at a rate
not less than $455 per week-as of

Dec. 1, 2016, at a rate of not less than
$913 per week)
n The employee's primary duty must

be the performance of office or nonmanual work directly related to the
management or general business operations of the employer or the employer's
customers

n The employee's primary duty includes

the exercise of discretion and independent judgment with respect to matters
of significance

PROFESSIONAL EXEMPTION
n The employee must be compensated on
a salary basis (currently at a rate not less
than $455 per week-as of Dec. 1, 2016,
at a rate of not less than $913 per week)
n The employee's primary duty must

be the performance of work requiring
advanced knowledge, defined as work
which is predominantly intellectual
in character and which includes work
requiring the consistent exercise of
discretion and judgment

n The advanced knowledge must be in a

field of science or learning

n The advanced knowledge must be cus-

tomarily acquired by a prolonged course
of specialized intellectual instruction.

KEY CHANGES AS PROVIDED
FOR IN THE FINAL RULE
The Final Rule focuses on updating the
salary and compensation levels needed for
executive, professional, and administrative
employees to qualify for the white collar
worker exemption. Specifically, the Final
Rule sets the standard salary level at the
40th percentile of earnings of full-time

salaried workers in the lowest-wage
Census Region, currently the South, which
is $913 per week or $47,476 annually
for a full-year worker. Additionally, the
Final Rule establishes a mechanism for
automatically updating the salary and
compensation levels every three years to
maintain the levels at the above percentiles
and to ensure that they continue to provide
useful and effective tests for exemption.
What this means for employers is that
starting on Dec. 1, 2016, employers will
need to re-classify employees, including part-time employees, earning less
than $47,476 per year as non-exempt
employees and start paying overtime at
a rate of one and one-and-a-half times
their regular rate for their time in excess
of 40 hours per week. Additionally, the
Final Rule provides for the automatic
updating of the salary thresholds every
three years, starting on Jan. 1, 2020, to
ensure that the salary threshold levels
will be maintained at the 40th percentile
of weekly earnings of full-time salaried
workers in the lowest wage census region, currently the South.
The above highlights the major
changes the Final Rule makes to the
overtime exemption for executive,
administrative, and professional employees, and this article is not intended
to be a comprehensive outline of all the
changes to the Final Rule. Therefore,
employers are advised to discuss these
changes with their legal counsel and
accountant professionals in order to
confirm compliance with the law.

n DOUGLAS A. TROYER, ESQ. IS A
PARTNER IN THE LAW FIRM MARCUS,
ERRICO, EMMER & BROOKS P.C.

To qualify for exemption, employees generally must meet certain
tests regarding their job duties and be paid on a salary basis
(i.e., as of Dec. 1, 2016, at a rate of not less than $913 per week).
December 2016

43
Condo Media - December 2016

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