Feds Announce Update To U.S. Overtime Pay Rules

The U.S. Department of Labor announced a final rule on September 24 that would make 1.3 million U.S. workers eligible for overtime pay under the Fair Labor Standards Act (FLSA). The new regulations will go into effect January 1, 2020.

The new 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 and commissions towards meeting the salary level. The new thresholds account for growth in employee earnings since the currently enforced thresholds were set in 2004.

The changes implemented by the Labor Department raise the "standard salary level" from the currently enforced level of $455 to $684 per week—equivalent to $35,568 per year for a full-year worker; raise the total annual compensation level for "highly compensated employees" from the currently-enforced level of $100,000 to $107,432 per year; allow employers to use nondiscretionary bonuses and incentive payments, including commissions, that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices; and revise the special salary levels for workers in U.S. territories and in the motion picture industry.

For more on the Labor Department’s announcement, click here.

filed under September 2019
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