The U.S. Department of Labor has announced a final rule to make 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act (FSLA).
The final rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FSLA’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses/ commissions towards meeting the salary level. The new thresholds account for growth in employee earnings since the currently enforced thresholds were set in 2004.
In the final rule, the Department is:
• raising the “standard salary level” from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
• raising the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year;
• allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices; and
• revising the special salary levels for workers in U.S. territories and in the motion picture industry.
The final rule will be effective on January 1, 2020.
For more information on what you and your business must now do to comply with this rule when it becomes effective, call English, Lucas, Priest & Owsley, LLP at 270.781.6500.