DOL Releases Final Overtime Rules

DOL Final Rule Effective January 1, 2020

The amounts required to be earned by an employee in order for that employee to be exempt from the FLSA overtime requirements will be $684 per week ($35,568 annually). This is an increase from the current level of $455 per week ($23,660 annually).

The new salary level for a Highly Compensated Employee (HCE) will be $107,432. The current level is $100,000.

The final rules permit employers to satisfy the new salary-level requirement by using nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the salary level test. Also, there is no change to the duties requirements to be considered exempt from FLSA overtime in addition to the required threshold.

The final rule does not provide for any automatic increases to the salary thresholds. In the final ruling, the DOL reaffirmed “its intent to update the standard salary level and HCE total annual compensation threshold more regularly in the future using notice and comment rulemaking” but declined to adopt the proposed rule to revisit the salary levels every four years.

It is important to note that the new salary levels do not apply to employers in Puerto Rico, the Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands. he current level of $455 per week ($23,660 annually) will continue to apply in those jurisdictions.

For a copy of the DOL final rule, click on the link provided below.

DOL Final Rule

The DOL has also released the following documents in conjunction with the final rule: