On September 24, 2019, Acting Secretary of Labor Patrick Pizzella announced that “for the first time in over 15 years, America’s workers will have an update to overtime regulations that will put overtime pay into the pockets of more than a million working Americans.”
Effective January 1, 2020, updates to the federal Fair Labor Standards Act (FLSA) overtime regulations include:
- An increase to the minimum salary amount for “exempt” employees to $684 per week ($35,568 annualized);
- An increase to the minimum annual compensation required for the “highly compensated employee (HCE)” exemption to $107,432 annually; and
- A new rule allowing employers to use non-discretionary bonuses, commissions, and other incentive payments paid at least annually to satisfy up to 10 percent of the minimum salary requirement.
Pizzella described the DOL’s most recent efforts to update the overtime rule as bringing “a common-sense approach that offers consistency and certainty for employers as well as clarity and prosperity for American workers.”
The one remaining question is, will any of those opposed to the new rule–many of whom supported the Obama Administration’s overtime rule setting the minimum salary at approximately $47,000–mount legal challenges in an attempt to stop the rule for taking effect? I’m pretty sure they will. So, stay tuned!
NY STATE EMPLOYERS: Although state Labor Standards include higher minimum salary amounts for the executive and administrative exemptions, there are other situations where the federal overtime regulations apply. NY employers should become familiar with the State’s Labor Standards, as well as the rules under the FLSA, to ensure they are following the appropriate regulations in each situation.
HR Compliance Experts offers a number of services for employers of all sizes. Our HR Compliance Risk Assessment is designed to identify potential noncompliance issues, including FLSA and State Labor Standards violations, provide solutions to resolve even the most complex issues, and follow-up to ensure compliance going forward.
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Disclaimer: This content is for informational purposes only, does not constitute a legal opinion, and is not legal advice. The facts of each situation should be considered and analyzed individually. Therefore, you should always consult with competent employment counsel regarding any issues discussed here.
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