SMALL BUSINESS NEWS

Oct 2019

 

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U.S. Labor Department Changed  Ovewrtime Rules

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

 

More than 143 million American workers are protected (or "covered") by the FLSA.  The FLSA applies only to employers whose annual sales total $500,000 or more or who are engaged in interstate commerce.  A few employers, including small farms (those that use relatively little outside paid labor) are explicitly exempt from the FLSA.

 

Under the FLSA “Non-Exempt” employees are entitled to overtime pay and compensatory time.  “Exempt” employees are exempt are generally not entitled to overtime pay and compensatory time.

 

Exempt employees are paid a salary rather than a wage and they perform administrative, executive or professional duties.  State laws also regulate other qualifications for Exempt employees.

 

These are the key changes that will take effect in January 1, 2020:

 

1.            raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);

 

2.  Raised the total annual compensation requirement for “highly compensated employees” (Exempt employees) from the currently enforced level of $100,000 per year to $107,432 per year;

 

3.  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, in recognition of evolving pay practices; and

 

4.  Revising the special salary levels for workers in U.S. territories and the motion picture industry.

 

Sources:
FLSA: Overtime Pay
FLSA: Overtime Update Rule
FLSA:  When is overtime pay due?

By Bill Williams