Department of Labor Issues Final Overtime Rule

Posted on October 1, 2019

More than one million workers will be eligible for overtime pay thanks to a recent U.S. Department of Labor rule.

The final rule, which which goes into effect Jan. 1, 2020, "updates the earnings thresholds necessary to exempt executive, administrative or professional employees from the Fair Labor Standards Act's minimum wage and overtime pay requirements," according to Department of Labor officials. The rule will:

* Raise the "standard salary level" from the currently enforced level of $455 per week to $684 per week, which is equivalent to $35,568 per year for a full-year worker;

* Raise the total annual compensation level for "highly compensated employees" from the currently enforced level of $100,000 per year to $107,432 per year;

* Allow employers to use "non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices," and;

* Revise special salary levels for workers in U.S. territories.

Department of Labor officials say the changes "are long overdue in light of wage and salary growth since 2004."

They estimate that 1.2 million additional workers will be entitled to minimum wage and overtime pay as a result of the increase to the standard salary level.

Related Topics: overtime rules, U.S. Department of Labor

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