U.S. Department of Labor Announces Final Rule to Make 1.3 Million American Workers Newly Eligible for Overtime Pay

On September 24, 2019, the U.S. Department of Labor updated the Fair Labor Standards Act’s (FLSA) overtime regulations. The final rule updates the earnings thresholds that are necessary to exempt executive, administrative and professional employees from the FLSA’s minimum wage and overtime pay requirements. The rule allows employers to count a portion of certain bonuses and commissions toward meeting the salary level. The new thresholds account for growth in employee earnings since the currently-enforced thresholds were last updated in 2004.

By implementing the final rule, the U.S. Department of Labor 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 revolving pay practices; and
  • revising the special salary levels for workers in U.S. territories and the motion picture industry.

The final rule becomes effective on January 1, 2020.

Please contact Brown & Connery’s Labor and Employment Department with any questions.