U.S. Department of Labor Issues Final Overtime Rule

09.26.2019
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On September 24,2019 The U.S. Department of Labor announced a final rule to make 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act (FLSA).

The final rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. The currently enforced thresholds were set in 2004, the new thresholds account for the growth in employee earnings. In the final rule, the Department is:

  • – raising the “standard salary level” from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
  • – raising the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year;
  • – allowing employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices; and
  • – revising the special salary levels for workers in U.S. territories and in the motion picture industry.

 

This rule does not change the fact that “Blue Collar Workers” cannot be paid on a salary basis and must be paid overtime. Workers who are non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime premium pay under the FLSA. This includes most green industry workers who are on site or in the field.

The final overtime rule will be effective on January 1, 2020.

For more information on this please visit: https://www.dol.gov/whd/overtime2019/

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