The Department of Labor’s September 24, 2019 new Rule increased the minimum salary level threshold for employees who are exempt from overtime. This is a significant change in employment law. Effective January 1, 2020, the salary-level threshold will increase from $455 a week to $684. In short, employees earning less than $35,500 per year are now entitled to mandatory overtime pay.
The Rule requires businesses to pay overtime wages to a larger group of employees who work more than 40 hours per week. DOL officials estimate that the new threshold will result in overtime pay to an additional 1.3 million employees.
The new Rule also increases the minimum annual exemption salary threshold for “highly compensated employees.”
Employers and employment attorneys need to know the new overtime Rule provides:
- Raises the “standard salary level” from the currently enforced level of $455 to $684 per week
- Raises the total annual compensation level for “highly compensated employees” 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% of the standard salary level; and
- Revises the special salary levels for workers in US territories and in the motion picture industry.
- The full text of the 2020 Final Overtime Rule is available on the DOL website.
The Rogge Dunn Group has extensive experience prosecuting and defending against cases with overtime issues. Connect with us to discuss your obligations as an employer or rights as an employee.