A new overtime policy from the Department of Labor (DOL) states that employees making less than $35,568 per year are now eligible for overtime pay. On September 24, the DOL ruled for the new rate to take effect January 1, 2020.
To be exempt from overtime under the federal Fair Labor Standards Act (FLSA), employees must be paid a minimum salary of the latest threshold amount and meet certain duties. If employees are paid less or do not meet the set standards, they must be paid 1.5 times their regular hourly rate when exceeding 40 hours in their workweek.
The new rule raises the currently salary threshold from $455 to $684 weekly, or $23,660 to $35,568 annually.
Non-discretionary bonuses, Incentive Payments and Commissions
Non-discretionary bonuses and incentive payments, including commissions, may be used to satisfy up to 10 percent of the standard salary level.
The new rule also raises the salary cutoff for highly compensated employees from $100,00 to $107,432 a year with a minimum of $685 paid weekly.
What Employers Need to Know
Employers have the option to reclassify employees to nonexempt status or to raise salaries above the new threshold to retain classification.
If an employer chooses to reclassify their employees from exempt to non-exempt, it is important to implement a time tracking system—if the newly classified employees are not doing so already—and to clearly communicate that this is not a demotion, just a new federal policy.
Employers should begin pulling data for exempt workers who are earning below the new threshold. Current BeyondPay clients can do so by running a Base Compensation Report.
Now is also an important time to review FLSA job duty thresholds. It’s important to remember that classification is not based on just salary level, but the white-collar exemption rules too. If you’re struggling to navigate the new rule, schedule a consultation for Managed HR services to see what a life-line to HR can do for your organization.
As always, current clients should reach out to the dedicated representatives through email@example.com to help navigate any lingering questions for the new threshold.
‘Background check’ is starting to feel like a buzzword in business – so do they really matter? What are their legal ramifications and how do you even get started? Basically, an employment background check reviews a candidate’s record. Screening requirements differ...
On February 19, 2019, Gov. Phil Murphy signed Assembly Bill 3975 to expand New Jersey’s Paid Family Leave program making it one of the most generous in the country. The bill will take effect July 2020 when paid leave will double from 6 to 12 weeks and intermittent...
New Jersey has become the first to pass a statewide Commuter Benefit Ordinance with S. 1547. On March 1, 2019, New Jersey Gov. Phil Murphy signed into law a new commuter benefit mandate affecting employers with more than 20 employees. Although most details are still...