Department of Labor's New Rule Expands Eligibility for Overtime Pay

Published September 27, 2019
On September 24, 2019, the United States Department of Labor (DOL) released its final rule updating the Fair Labor Standards Act (FLSA)'s regulations concerning minimum wage and overtime pay exemptions. The 2019 final rule formally rescinds the DOL's widely debated 2016 rule that a federal judge in Texas invalidated shortly after publication.
 
The 2019 final rule implements two significant changes. First, it raises the salary threshold to qualify as exempt from overtime pay under one of the FLSA's "white-collar employee" exemptions from $455 per week ($23,660 annual) to $684 per week ($35,568 annual). Second, the final rule raises the salary threshold to qualify as exempt from overtime pay under the FLSA's "highly compensated employee" exemption from $100,000 to $107,432 total annual compensation. A highly compensated employee is an individual who: (1) earns total annual compensation of $107,432 or more, which includes at least $684 per week on a salary or fee basis; (2) primary duties include performing office or non-manual-work; and (3) customarily and regularly performs at least one of the exempt duties of an employee with the "white-collar" exemption.
 
The final rule is effective January 1, 2020. Feel free to contact any Robbins Schwartz attorney in its Labor and Employment group to discuss how these changes may impact your policies and procedures.