On September 24, 2019, the U.S. Department of Labor issued updates to the earnings thresholds necessary to exempt salaried employees from minimum wage and overtime pay requirements. This update also allows employers to count a portion of certain bonuses/commissions towards meeting the salary level.
The final rule is effective on January 1, 2020 and:
- raises the “standard salary level” from the current level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);
- raises the total annual compensation requirement for “highly compensated employees” from the current level of $100,000 per year to $107,432 per year;
- allows employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level; and
- revises the special salary levels for workers in U.S. territories and the motion picture industry.
Any employer who is paying a salaried employee less than $35,568 per year may be required to pay those employees overtime if they work more than 40 hours per week.
Here is a link for more information about these new rule changes:
Our HR Pros can help make sure your employees are paid properly. For more information, visit HR Support Center.