BREAKING NEWS: FINAL OVERTIME RULE (Exempt vs. Nonexempt Employees)

Today, on September 24, 2019, the U.S. Department of Labor issued a Final Overtime Rule. As many of you will remember, in 2016 a Final Rule was issued that changed the overtime threshold from the current $455/week ($23,660 annually) to $913/weekly ($47,476 annually). That Rule was blocked by a Federal Judge in Texas. Since that time, it has been expected that a new rule would be forthcoming with an adjusted threshold but lower than the proposed threshold in the 2016 version.

With the Final Rule issued today, which becomes effective January 1, 2020, the DOL raises the “standard salary level” from the currently enforced level of $455 to $684 per week. What this means is that any employee currently classified as exempt who make less than $684/week ($35,568 annually) is now to be classified as a non-exempt employee and be paid overtime, at the rate of 1 ½ times their regular hourly rate for hours worked in excess of 40 hours in a workweek.

It is estimated that 1.2 million additional workers will be entitled to overtime pay as a result of this increase. The threshold amount had not been changed since 2004.

If you have any questions on this, or any other employee relations matter, please contact one of the Human Resources professionals at Donnelly-Boland and Associates.

Rich Healy, Senior Executive

Donnelly-Boland and Associates

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