By: Samantha S. Otero, Business Law Practice Group
On September 24, 2019, the U.S. Department of Labor announced a final rule on overtime, increasing the earning threshold for employees treated as exempt from the Fair Labor Standards Act (FLSA) minimum wage and overtime pay requirements. This new rule, effective January 1, 2020, raises the federal overtime exemption threshold from $23,660 per year ($455/week) to $35,568 per year ($684/week). With respect to highly compensated employees, the total annual compensation test is now $107,432.
The final rule permits employers to apply non-discretionary bonus and other incentive payments to satisfy up to 10 percent of the standard salary level, provided such non-discretionary payments are paid at least annually or more frequently. The final overtime rule does not include a provision that automatically would increase the salary level test or total annual compensation amount on some regular or periodic basis. Most significantly, the final overtime rule does not make changes to the duties tests for these exemptions.
The new overtime rule is published in the Federal Register. The DOL’s Wage and Hour Division (WHD) linked to the Federal Register on its new overtime portal, which includes additional resources such as:
If you have any questions, the employment law attorneys at McCandlish Holton are here to help. Reach Sam Otero at (804) 775-3868 for assistance.