ConsultStu

New Overtime Rule: Exempt Threshold To Increase from $23,660 to $35,568 January 1, 2020

WHAT HAPPENED?

This Tuesday (September 24, 2019), the Department of Labor announced the following changes to the FLSA’s white-collar overtime exemptions, to become effective January 1, 2020:

The minimum salary threshold for exempt status will be $684 per week, annualized to $35,568 per year.
The highly compensated employee exemption’s total annual compensation requirement will be set at $107,432 per year (to include the new threshold as minimum weekly base salary).
No change has been made to the various other exemptions (for example, outside sales) that do not specifically include a salary requirement even if the employee happens to earn a salary.
There will be no “automatic” threshold updates, such as cost-of-living increases.

If you recall, a much higher increase had been set to become effective back in December 1, 2016, but was scrapped by federal and state court actions. While there is no way to guarantee that legal challenges might not delay or alter this latest ruling, we strongly advise our clients to plan for a January 1st implementation. The new threshold formula and guidelines are less flawed are much less contentious, with the majority of the concerns driving the 2016 lawsuits resolved. Overtime Rule 2.0 looks like a solid go.

WHAT SHOULD I DO NOW?

First, evaluate your compensation structure to see if anyone who is currently exempt will fail to qualify under the new threshold. Take a moment to consider whether they might be subject to alternative FLSA exemptions. If not, develop new FLSA compliant pay plans (either applying overtime pay or increasing exempt salaries). Determine the timing, administrative tasks, and communications necessary to meet the January 1st deadline. Then stay tuned to ConsultStu for the updates you need to keep your company on track. NOTE: If you are a ConsultStu retainer client, Stu will be covering this topic at your next monthly HR support call, and we will assist you with any needed preparation!

HR Categories

1095C form 300 Log 401(k)8(a)(1)Accommodation Affordable Care Act Americans with Disabilities Act Arbitration ARPA Audits Background screening Bilingual Bonuses Business Expenses Cannabidiol (CBD)CDC CDL CFPB Child labor CHIP Notice Christmas party Clearinghouse COBRA Commercial Motor Vehicle Driver Company Culture Company Property Compensation Compliance Concerted Activity CONNECT Construction consultstu Consultstu Team Contagious disease Coronavirus Craft Beer Department of Labor Direct Threat Disabilities Discrimination DOT Downsizing and Restructuring Dress Code Drivers Drug and Alcohol Drug Free Workplace E-Verify EEO-1 Form EEOC Employee benefits Employee Handbook Employee Illness Employee Injury Employee Misconduct Employee Policies Employee Recognition Employee Referral Employee Rights Employment Poster ERISA Essential functions Executive Order Exempt Employee Exit Interview Fair Credit Reporting Act Fair Labor Standards Act Fall Protection Federal Contractors FFCRA Financial Well-being Firearm Fitness for Duty Florida rules Fluency FMCSA FMLA Form 5500 Form W-4 Fractional HR Gender Non-conformity General HR Questions Goal Setting GPS Group Health Insurance Harassment Hiring Holidays HR Compliance HR Costs HR Resources HR software Human Resources Human Trafficking I9 Form Immigration Independent Contractor Individualized Assessment Injury Statistics Insurance Interviews Investigations IRS ITA Job Description Job Post Joint Employer K1 Leave of Absence Leaving a PEO Management Manager Medical Exams Medical Marijuana Minimum Wage Morale National Origin New Hire NLRB No-match letter Non-complete Agreements Onboarding Opioids OSHA Outplacement Overtime Paid Leave Pay Cards Pay or Play Paycheck Protection Program Payroll Payroll Protection Program Performance Improvement Plan Performance Review Personnel File Post offer medical questionnaire Posters Pregnancy Publix Immigration Certification Reasonable Accomodation Recall Letter Record Keeping Recruiting Religion Remote employees Restaurants Resume Retaliation Retention Retirement Rewards Risk Management Safety Salaried employees SBA Section 7 Rights Self Appraisal Sick Leave SMART goals Social Media Social Security card Start up Taxes Temporary Employee Termination Tipped Employees Title VII TPD Benefits Training Unemployment Uniforms USCIS Vaccines W2 W4 Wage and Hour Wellness program Work from Home Workers Compensation Workplace Monitoring Wrap Plans

Show All Categories

Show Less Categories