Department of Labor Finalizes Federal Overtime Rule

By: Bridgette A Drelling, PHR, SHRM-CP
Certified Leave Administrator, HRBP McCloskey Partners, LLC
September 25, 2019

Hot off the presses…

Yesterday, September 24, 2019, the Department of Labor announced that effective January 1, 2020, the final rule regarding Overtime Exemptions, under the Fair Labor Standards Act (FLSA), will go into effect. The most notable changes include:

  • Increasing the minimum salary threshold from $455 per week ($23,600 annually) to $684 per week ($35,568 annually);
  • Increasing the total annual compensation requirement for “Highly Compensated Employees (HCE)” from $100,000 to $107,432 per year;
  • Allowing nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level; and
  • Revising the special salary levels for workers in U.S. territories and the motion picture industry.

At this time, there are no changes to the FLSA Exemption “Duties Tests.”

What is a “Duties Test?”

The “Duties Test” is provided by the Department of Labor and is a test that employers can use to determine if employees are exempt from receiving overtime compensation or are to be classified as non-exempt and are entitled to overtime compensation when hours are worked over 40 regular each week.

The Department of Labor projects that an estimated 1.3 million workers will become entitled to overtime protection under this new rule.

Not sure what all this means for you?? Confused by FLSA exempt and non-exempt classifications? 

Now is the time to plan so that as you head into the new year, any changes needed to your employee’s FLSA classifications are updated and your company is in compliance as of 1/1/2020. 

The McCloskey Partners team can assist you in reviewing positions and completing the “Duties Tests,” establishing a competitive compensation strategy and assisting with compliance.

When you have Human Resource questions, contact McCloskey Partners, LLC at 215-716-3035 x 0.    Or email us at admin@McCloskeyPartners.com

Check out our website at www.mccloskeypartners.com