The U.S. Labor Department has proposed an increase in the minimum salary required to meet the basic compensation criterion (the minimum salary requirement for salaried employees), possibly resulting in major payroll upheaval for private-independent school administrators across the board. The updated amount is currently anticipated to be $50,440.00, increased from $24,500.00. Another significant change in the rule is that this amount will be automatically updated to reflect inflation.
The concern for independent schools has been the question whether teachers and other employees would be included or excluded in the change. As of July 6, 2015, the current wording of the law implies no impact to employees defined as teachers. The major impact would be for other employees of the school qualified as exempt (meaning exempt from overtime regulations). For these employees, you may be required to increase their salaries to the new minimum amount to keep them as exempt from overtime.
The proposal was published on July 6, 2015 and is open for public comment until September 4, 2015. At this point, it is unclear when the final regulation will be published. However, experts expect that it will pass before the end of 2015 and will become law about 30 days after passage.
ISM advises you to assess the cost of this change so that you are ready. We strongly encourage your school to evaluate its budgetary risks immediately, to estimate the impact to your budget for the concluding six to seven months of this fiscal year.
A future, more detailed Ideas & Perspectives article will provide more detailed information and advice should this bill become law. In the meantime, consult your legal counsel concerning the avenues you should take now to prepare for this impending mandate.
