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DOL Releases Final Overtime Rule Changes

In late September the United States Department of Labor (DOL) released its final rules for establishing the amounts required to be earned by an employee in a given calendar year for that employee to be considered “exempt” from the Fair Labor Standards Act (FLSA) overtime requirements.[1]

Under the final rules, which go into effect January 1, 2020, the amounts required to be earned by an employee for that employee to be exempt from the FLSA overtime requirements will be:

  • $684 per week ($35,568 annually), and
  • $107,432 for a Highly Compensated Employee

Background

On May 18, 2016, the DOL released final regulations that modified certain provisions of the FLSA. The final regulations increased the minimum salary required to be earned from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). The final regulations also established a mechanism for automatically updating the salary and compensation levels every three years, beginning January 1, 2020. Additionally, the final regulations increased the total annual compensation requirement for highly compensated employees (HCEs) subject to a minimal duties test to $134,004 per year from the previous threshold of $100,000.

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[1] Keep in mind that some states, such as California, have their own standards for treating individuals as exempt employees. The general rule of thumb where the standards are different is that the employer is required to follow the stricter set of rules.

Posted in: Employment Law, News

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