The New Year Will Ring in New Overtime Rules

If you have salaried employees making less than $35,568 a year, they may soon qualify for overtime pay. The U.S. Department of Labor (DOL) recently announced a rule change that will raise the white-collar exemption threshold to $35,568 per year. That means a salaried worker making less than $684 a week will be eligible for overtime pay even if they are a manager. The Fair Labor Standards Act (FLSA) threshold is currently $23,660 or $455 per week.

 

For a salaried employee to be exempt from the overtime pay rule, compensation must meet or exceed the new threshold and job duties have to fall within the classification of the FLSA’s white-collar exemptions. These exemptions are for executives (manages the company, department or subdivision), professionals (work that requires advanced knowledge, training or instruction) and administrative positions (office or non-manual work directly related to the management or operations of the business).

 

The new rule takes effect January 1, 2020, and is likely to impact the food service, retail, education, and non-profit industries the most. If you have concerns or questions about how this may affect your small or medium-sized business, contact us at Cain Ellsworth and we’ll help you navigate the change.

 

According to the DOL, nationwide an estimated 100,000 workers will benefit by having their income rise and another 1.2 million will now qualify for time-and-a-half pay for every hour worked over 40 hours per week. You can read more about the rule change on the Department of Labor’s website.

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