New Overtime Rule Effective January 1, 2020

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On September 24, 2019, the Department of Labor announced its final updates to the “white collar” overtime exemption rules. These new rules go into effect on January 1, 2020. These rules affect, among others, administrative, executive, and professional employees who may be exempt from overtime payments if certain conditions are met. The updates to the exemption conditions include:

  • Raising the standard salary condition from $455 per week to $684 per week ($35,568.00 per year for full time workers);
  • Raising the total annual compensation condition for “highly compensated employees” from $100,000.00 to $107,432.00 per year; and
  • Allowing employers to use certain bonuses and incentive payments to satisfy up to ten percent of the above salary conditions.

The exemption duties tests remain unchanged.  You should have all of your policies and procedures in place before the deadline for your exempt employees and be prepared to begin paying your exempt employees at the revised rates on or before January 1, 2020.

Please let us know if you have questions about this or any other legal topic.

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