The Wage and Hour Division of the U.S. Department of Labor today announced its final rule regarding overtime pay under the Fair Labor Standards Act (FLSA). The final rule will be effective on January 1, 2020. The final rule updates the earnings thresholds necessary to exempt executive, administrative or professional employees from the FLSA’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. Other aspects of the final rule include raising the standard salary level from $455 to $684 per week ($35,568.00 per year for a full year worker), revising the special salary levels for workers in U.S. territories and the motion picture industry, and raising the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year. In addition, the rule will allow employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10 percent of the standard salary level. The final rule is designed to take into account current employment practices and is expected to provide overtime to 1.3 million American workers.
For more information on the final rule, click here. If you have questions about how the final rule might impact your employment practices, please contact Joseph F. Spitzzeri, Genevieve M. LeFevour or Christopher J. Carlos.