Are You Ready for the New Federal Overtime Rule?

The U.S. Department of Labor issued its final rule amending the overtime regulations that take effect January 1, 2020. To be exempt from overtime under the Fair Labor Standards Act's (FLSA's) white-collar exemptions, employees must be paid a salary of at least the threshold amount and meet certain duties tests. If they are paid less or do not meet the tests, they must be paid 1.5 times their regular hourly rate for hours worked in excess of 40 in a workweek.

The new rule will raise the salary threshold to $684 a week ($35,568 annualized) from $455 a week ($23,660 annualized). Non-discretionary bonuses and incentive payments, including commissions, paid on an annual or more frequent basis may be used to satisfy up to 10 percent of the standard salary level. The U.S. Department of Labor said the rule will make about 1.3 million workers newly eligible for overtime pay.
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In addition to raising the salary cutoff for exempt workers, the new rule raises the threshold for highly compensated employees from $100,000 a year to $107,432, of which $684 must be paid weekly on a salary or fee basis. 

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