New Overtime Rules in Effect
January 1, 2020
Are you ready for it? Do you understand the rules?
ACT is here to help you sort it all out!
– Divide your employees in two groups – EXEMPT and NON-EXEMPT. If they are non-exempt and are eligible for overtime, over 40 hours per week (worked), these rules do not apply.
– Make sure those employees you consider EXEMPT are truly exempt by reviewing the FLSA (Fair Labor Standards Act) rules under executive, administrative, professional, and outside sales requirements. If an employee does not meet these rules, you need to move them to the non-exempt list and pay overtime for anything over 40 hours per week (worked).
– You need to review each EXEMPT employee’s salary. Starting with January 1, 2020, they must make over $684 per week or $35,468 per year. You have three options:
- Increase pay to meet the new salary requirements;
- Increase pay minus 10% ($3,546.80) and pay the 10% in nondiscretionary bonuses or incentive payments (commissions) by year end;
- No increase given – the employee will now qualify for overtime for any hours worked over 40 hours per week.
– “Highly Compensated” employees annual compensation is raised from $100,000 per year to $107,432 per year. These employees must meet the EXEMPT rules and the 10% rule does not apply.