U.S Department of Labor Issues Final Overtime Rule in 2019
In September 2019 the DOL finally issued its final rule on overtime, interpreting the requirements under the federal Fair Labor Standards Act (FLSA). The outcome of this rule is expected to make 1.3 million American workers newly eligible for overtime pay. This will have a big impact on Florida employers and businesses should immediately begin planning whether they need to make changes to their pay practices.
The final rule updates the earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses/commissions towards meeting the salary level.
In the final rule, the DOL 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.
Disclaimer: This final rule has been submitted to the Office of the Federal Register (OFR) for publication, and is currently pending placement on public inspection at the OFR and publication in the Federal Register. The final rule is effective on January 1, 2020. This means that if you have an employee who you believe is exempt from receiving overtime pay due to them being a “white-collar” employee, then after January 1, 2020, that employee must receive at a salary of at least $684 per week (which equates to an annualized salary of $35,568 per year).