The United States Department of Labor (DOL) has issued a final ruling regarding overtime eligibility for employees that will impact over 1.3 million Americans. The DOL rule was initially planned to go into effect in December of 2016, but it was delayed due to a court order.
The new rule is now effective as of January 1, 2020.
Tax-exempt organizations are not excluded from the new ruling.
The following are key changes in the new rule:
- The standard salary threshold for exempt employees will increase from $455 per week ($23,600 annually) to $684 per week ($35,568 annually). This means that, effective January 1, 2020, employers will need to pay overtime to employees who earn less than $684 per week ($35,568 annually).
- Employers can use incentive pay, such as bonuses and commissions, to meet up to 10% of the above-mentioned salary threshold.
- The threshold for highly-compensated employees will increase from $100,000 to $107,432 annually. This threshold applies to professional, administrative and non-executive employees who earn at least $684 per week and whose primary duties involve performing office duties/work and include at least one of the duties of a professional employee.
Warren Averett Workplace can assist you in determining compliance and can assist in determining any actions that you may need to take in order to minimize the impact of these new rules.