Today, the DOL finally issued a new rule that updates the “thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements.” Beginning January 1, 2020, the salary threshold for exempt employees will be $684 per week (up from $455 per week). That means that beginning January 1, 2020, employees who make less than $35,568 will be eligible for overtime pay.
The new rule also allows employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level.
It is unclear whether the DOL’s new rule will be challenged. However, while awaiting developments, employers should: (i) analyze the compensation of all employees who are currently classified as exempt; (ii) identify exempt employees with salaries below the new threshold; (iii) consider the number of hours worked by such employees; and (iv) make preliminary decisions about whether the identified employees should be reclassified as non-exempt or be provided with salary increases to maintain their exempt status.
The new rule is here: Final Overtime Rule (03276818x7AC43)