DOL Announces Update to Overtime Rule Expanding Eligibility

​Last updated in 2004, earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements have been raised to account for growth in employee earnings. The final rule is effective beginning January 1, 2020.
 
In short, the final rule is:

• raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);
• 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;
• allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices; and
• revising the special salary levels for workers in U.S. territories and the motion picture industry.

 
While the final official rule is under review, the announcement found here, will give employers additional time to plan accordingly for 2020. The official final rule will be published in the federal register following review.