DOL Announced Final Rule on Overtime

Which employees of your business qualify for time and a half? It’s time to reevaluate that question, namely at the executive, administrative, and professional levels. The threshold for exemption has changed. On September 24, 2019, the U.S. Department of Labor (DOL) announced a final rule on overtime. Effective January 1, 2020, the DOL estimates 1.3 million more workers will be eligible for overtime pay under the Fair Labor Standards Act (FLSA). 

According to the DOL, the final rule establishes the following:

  • raising the “standard salary level” for exemption from the current level of $455 per week 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 current level of $100,000 to $107,432 per year; and
  • allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices.

What should you do to be prepared?

  • Identify all employees as either exempt or nonexempt based on job function, role, and duties.
  • Determine if those classified as exempt meet the minimum pay requirements under the new rules.

Is your business ready for the change? The professionals at Albin, Randall & Bennett are here to help. Contact us today.