By now the ukulele you swore you’d learn as part of your New Year’s resolution is collecting dust. However, the Department of Labor’s resolution to increase the salary level for white-collar employees exempt from overtime pay is here to stay. Effective January 1, 2020, under the Fair Labor Standards Act (FLSA) the salary level increased from $455 per week ($23,660 annually for full-time employees) to $684 per week ($35,568 annually). Employees earning less than this threshold are eligible to receive time and a half pay for any hours over 40 worked in a week.
Included in these changes, when calculating an employee’s salary level, 10% of compensation may include non-discretionary bonuses and incentive payments. To qualify, these payments must be made on an annual or more frequent basis.
Once it is determined that an employee earns more than the requisite salary level, said employee is not automatically exempt from receiving overtime pay. There are other requirements which must be fulfilled, depending upon which exemption category the employee falls under, detailed here.
Also included in the changes to the FLSA, “highly compensated employees,” which are exempt from overtime and minimum wage regulations, must now earn an annual salary of $107,432.
StraightforWARD Legal Advice:
Employers should ensure that compensation to their employees meets these requirements so as to avoid penalties and fines.