Department of Labor Issues Final Overtime Rule

On 9/24/19 the Department of Labor released a final rule that will make 1.3 American workers newly eligible for overtime pay. The final rule increases the earning thresholds for exempting executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements. The rule also allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. In the final rule, which is effective on January 1, 2020, the Department of Labor is:

  • raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);

  • raising the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year;

  • allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices; and

  • revising the special salary levels for workers in U.S. territories and the motion picture industry.

The Federal Register notice for the final rule can be found here.

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