The Department of Labor (DOL) is poised to implement revised regulations that will make it more difficult for a worker to qualify as an exempt employee under the Fair Labor Standards Act. The DOL’s final rule will go into effect on January 1, 2020 and does the following:
- raises 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);
- raises the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year; and
- 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
More information can be found at the following DOL link: https://www.dol.gov/whd/overtime2019/.
What should you do? First, you should assess the salary level of your organization’s exempt employees to determine if anyone will lose their exempt status because of these new regulations. If that scenario exists, you should consider raising the worker’s salary to meet the new test or reclassify that worker as non-exempt.
We are available to assist in your analysis and/or implementation of adjustments necessitated by these new regulations.