Last week, the U.S. Department of Labor announced their final rule regarding overtime pay under the Fair Labor Standards Act. Effective January 1, 2020, the one-year salary threshold to qualify for executive, administrative, or professional employee exemptions will be raised to $35,568 (up from its current $23,660). The Department also made three changes to existing regulations: the rule (1.) raises the total annual compensation level for highly compensated employees from $100,000 to $107,432 per year; (2.) allows employers to use nondiscretionary bonuses and incentive pay to satisfy up to 10% of the standard salary level; and (3.) revises the special salary levels for workers in U.S. territories.
The final rule also abandoned a proposed provision that would have mandated salary threshold increases every four years; however, they did note their intention to address future increases more regularly than before. Overall, they mark a stark change from the previous administration’s attempt to increase the salary threshold to over $47,000, which was blocked by a federal judge in 2017.
Courtesy of FMI
