Breaking News Today – Tuesday, September 24, 2019
The Department of Labor announced the long-awaited final overtime rule making an estimated 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act (FLSA).
The final rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements and allows employers to count a portion of certain bonuses (and commissions) towards meeting the salary level. The new thresholds account for growth in employee earnings since the currently enforced thresholds, mandated in 2004. Under the final rule the new standards:
- Raise the “standard salary level” from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
- raise the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year;
- allows employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices;
- revises the special salary levels for workers in U.S. territories and in the motion picture industry.
The final rule becomes effective on January 1, 2020. View the regulations here.