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New overtime pay rule effective today

01/01/2020

The Department of Labor has announced a final rule updating its overtime pay rules under the Fair Labor Standards Act. Under the final rule, which becomes effective January 1, 2020, the Department is:

  • raising 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);
  • raising the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year;
  • allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices; and
  • revising the special salary levels for workers in U.S. territories and the motion picture industry.

Under the revisions made by the final rule, to be exempt from the requirement to receive overtime pay of at least 150% of their regular pay rate for hours worked in excess of 40 in a workweek, an employee must be salaried, be paid at least $684 per week, and primarily perform executive, administrative, or professional duties, as defined in DOL's regulations at 29 CFR 541.

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