Final Overtime Rule Update
On September 24, 2019, the Department of Labor announced the final overtime rules that go into effect on January 1, 2020. The most substantial modification of the final rule is the increase in the threshold salary from $455 a week ($23,660 annually) to $684 a week ($35,568 annually). The new rule also raises the salary threshold for highly compensated employees from $100,000 to $107,432. These threshold changes will not include the automatic adjustments that were originally proposed. The final rule does include nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to be used to satisfy up to 10% of the standard salary level. Changes to the new overtime rules will affect more than 1.3 million American workers.
There are several things that employers can do to prepare for these new overtime rule. Employers should:
- Review and update current job descriptions
- Review job duties of the current exempt employees to make sure they are classified correctly under the exemption criteria
- Review employee salaries to determine who is currently making less than $35,568 annually and decide if the company wants to reclassify to nonexempt or increase the salary
- Review highly compensated employees who are making under $107,432 to make sure they meet the exemption criteria
Workforce Solutions can assist clients with job descriptions, reviewing job duties and determining exemption status, determining the cost of paying overtime vs reclassifying employees and communicating to employees who will be reclassified. Workforce Solutions has the background, expertise, and tools to assist clients through this process. Please contact Workforce Solutions at 833-HR4-HIRE or [email protected].