Today, September 24, 2019, the United States Department of Labor (“DOL”) announced the final rule which changes the “white collar” employee exemption salary threshold to the overtime pay requirements under the Fair Labor Standards Act (“FLSA”).
Previously, executive, administrative, and professional employees (so-called “white collar” employees) were considered exempt from overtime pay if the employees were paid at least $455 per week ($23,660 annually) and satisfied the duty requirements. Under the new rule to take effect on January 1, 2020, employees who are paid at least $684 per week ($35,568 annually) and satisfy the duty requirements will be considered exempt from overtime pay.
The DOL estimates that 1.3 million Americans will be eligible for overtime pay under the new rule as compared to the previous threshold salary of $23,660. However, many employees will lose their exempt status as a result of these changes. If your company has salaried, currently-exempt employees who are making at least $23,660 per year but
than $35,568 per year, those employees will become
unless that person’s salary is increased.
The final rule also raised the total annual compensation level for “highly compensated employees” (“HCEs”) from the currently-enforced level of $100,000 to $107,432 per year.
is the DOL’s fact sheet on the final rule. The final rule language will also be published in the Federal Register.
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