The United States Department of Labor Updated White Collar Exemption Rule Became Final on September 24, 2019

September 30th, 2019 by JBWK

This final rule should increase the number of employees legally entitled to overtime compensation as it increases the amount of compensation an employee must earn in order to qualify as an exempt executive, administrative, or professional employees from the Fair Labor Standard Act’s minimum wage and overtime pay requirements to a salary level of $684 per week from $455 per week. The final rule, however, does allow employers to count a portion of certain bonuses and commissions in meeting the salary level. The final rule will become effective on January 1, 2020.

 

Below are the salient points of new rule

 

• the standard salary level for qualifying as exempt from overtime will increase to $684 per week or $35,568 on annual basis
• the total annual compensation level for “highly compensated employees (HCE)” will increase from $100,000 to $107,432 per year;
• employers will be allowed to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level; and
• revised the special salary levels for workers in U.S. territories and in the motion picture industry.

 

Although the new rules will not go into effect until January 1, 2020, now is the time to begin planning and preparing for the implementation of these new rules. Additionally, it provides an opportunity to review your overall compliance with the FLSA exemption rules.

 

If you have any questions, please do not hesitate to contact Robyn Hansen at 757.873.8074, Email rhansen@jbwk.com or Jennifer Muse at 757.873.8045, Email: jmuse@jbwk.com, members of the JBWK Employment Law Practice Group.

 

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