By Anne Baggott
September 26, 2019
Employees who make less than $35,568 per year are now eligible for overtime pay under a final rule issued recently by the U.S. Department of Labor (DOL). The new rate will take effect January 1, 2020.
The new rule will increase the salary threshold to $684 a week ($35,568 annualized) from $455 a week ($23,660 annualized). A 2016 Obama-administration rule, which was blocked by a federal judge, would have doubled the salary threshold. The rule did not change the duties test for the “white-collar” administrative, managerial, and professional exemptions to overtime. Unlike the 2016 Obama rule, this new rule also does not include automatic adjustments to the salary threshold.
The DOL rule also raises the exemption threshold for highly compensated employees from $100,000 annually to $107,432, of which $684 must be paid weekly on a salary or fee basis.
Employers should take action now by reviewing pay for all exempt employees to ensure compensation meets the new threshold. If it does not, employers should adjust exempt employees’ pay or reclassify employees as non-exempt. Now would also be a good time to review exempt employees’ duties to ensure they truly qualify for the exemption.