By Emily Faracca – On
1.3 million workers must now be compensated for putting in more than 40 hours.
On Sept. 24, the U.S. Department of Labor finalized new rules regarding overtime pay. According to the DOL, the rules bring "a common sense approach that offers consistency and certainty for employers as well as clarity and prosperity for American workers."
The rules will go into effect January 1, 2020, which gives you some time to ensure your overtime protocol is up to date. Want to know if you or your employees qualify? Here's what you need to know:
When this final rule takes effect, the “standard” (aka minimum) salary level will be $684 per week (equivalent to $35,568 annually for a full-year worker).
The final rule also contains some other key provisions:
- The exemption referred to as “highly compensated employees” increases the current threshold of $100,000 per year of salary to $107,432 per year (notably less than the $147,414 threshold in the DOL’s prior proposed rule).
- Employers may include non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level.
- There are no changes to the duties test, which determines whether employees fall within each of the white-collar exemptions.
Bottom Line: If you often have employees scheduled for more than 40 hours, or employees who are clocked in for more than 40 hours, review the exemptions and make sure your overtime policies are up to date!
Be sure to factor these changes into your 2020 fiscal budget, and review your employees' duties and job descriptions to make sure they are properly classified (exempt or non-exempt.)