Since 2004, there haven’t been any significant changes in the overtime salary thresholds, until recently.
On September 24, 2019, the Department of Labor (DOL) announced the long-awaited final overtime rule.
The Fair Labor Standards Act (FLSA) requires employers to pay time-and-a-half rates to workers making less than a threshold amount for all hours beyond 40/week. The new rule lifts the annual salary threshold, allowing more workers to qualify for overtime wages.
These are the changes that are set to take effect on January 1, 2020.
- The salary threshold to meet the executive, administrative, or professional exemption will now be $35,568/year or $684/week (an increase from $23,660/year and $455/week). The threshold is slightly higher than the initial draft of the rule.
- The salary threshold to meet the “highly compensated” worker exemption will now be $107,432/year (an increase from $100,000/year). The threshold is slightly lower than the DOL’s initial draft, but still higher than the previous threshold.
- Employers can now use nondiscretionary bonuses, incentives, and commissions that are paid at least annually, to satisfy up to 10% of the salary threshold.
What do these changes mean for you?
These changes could affect whether you are eligible or exempt for overtime pay. The DOL estimates that approximately 1.3 million additional workers will now be eligible for overtime.
If you have concerns regarding your legally obligated pay, workplace harassment, or discrimination on the job, contact Baldwin & Vernon to discuss your case.