Overtime Pay Requirements: Rule Update, Effective January 1, 2020
By: Lindsay Hewitt, Virtus Law Attorney
On September 24, 2019, the U.S. Department of Labor (the “DOL”) announced a final rule regarding the earnings thresholds necessary to exempt executive, administrative, and professional employees from the Fair Labor Standards Act’s (“FLSA”) minimum wage and overtime pay requirements.
Employees making less than $35,500 per year (or $684 per week) will now be entitled to receive mandatory overtime pay from their employers. Currently, the threshold is $23,660 (or $455 per week). The total annual compensation level threshold for “highly compensated employees” will also be increased from the current level of $100,000 per year to $107,432 per year. In addition, employers will be able to count certain nondiscretionary bonuses and incentive payments, like commissions, for up to 10% of an employee’s salary.
According to the DOL, the new rule, which goes in to effect January 1, 2020, will make around 1.3 million additional U.S. workers eligible for overtime pay. It is important for employers to be proactive by pulling information regarding any exempt employees who are earning close to the wage cutoff, flagging any positions that need to be reclassified, and determining which workers need to be paid overtime.
At Virtus Law PLLC, we have the experience and skills to assist employers to ensure compliance with the new rule including making sure employees are classified correctly to avoid costly litigation. Contact us by calling (612) 888-1000 or by emailing us at firstname.lastname@example.org. Our main office is in Minneapolis, with other offices located in Maplewood, Cambridge, Edina, and Mendota Heights.