On September 24, 2019, the U.S. Department of Labor announced a final rule regarding overtime pay, which 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 also allows employers to count a portion of certain bonuses/commissions towards meeting the salary level.
In the final rule:
- The “standard salary level” increases from $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);
- The total annual compensation requirement for “highly compensated employees” increases from $100,000 per year to $107,432 per year;
- Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary level; and
- The special salary levels for workers in U.S. territories and the motion picture industry was revised.
The final rule is effective on January 1, 2020.
Read the final rule