On September 24, the U.S. Department of Labor announced a final rule to make 1.3 million American workers newly eligible for overtime pay.
The final rule updates the earnings thresholds necessary to exempt executive, administrative, and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements and allows employers to count a portion of certain bonuses and/or commissions towards meeting the salary level.
The final rule:
- raises the “standard salary level” from the currently enforced level of $455 per week to $684 per week, the equivalent to $35,568 per year for a full-year worker.
- raises the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year.
- allows 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.
- revises the special salary levels for workers in U.S. territories and the motion picture industry.
The final rule goes into effect on January 1, 2020.