On September 23, 2019, the U.S. Department of Labor (DOL) issued its Final Rule relating to exemptions and overtime. The most significant change for employers is an increase to the salary threshold for exempt employees up to $35,568 from the $23,660 threshold established in 2004. The new rule, set to take effect on January 1, 2020, likely means an additional 1.3 million workers will now be compensated for working overtime.
Key Takeaways from the Final Rule
- Raises the salary threshold to $684 per week ($35,568 per year) from the currently enforced level of $455 per week ($23,000 per year).
- Modifies the total annual compensation threshold for Highly Compensated Employees to $107,432 from the current threshold of $100,000.
- Recognizes evolving pay practices by allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary level.
- Revises the special salary level for U.S. Territories and motion picture industry workers.