HR Compliance

DOL Releases Final Overtime Rule, Setting Standard Salary Threshold at $684 Per Week

By

Amy Double

| Sep 24, 2019

Today, the U.S. Department of Labor released its final rule that increases the salary threshold for workers in the executive, administrative and professional exemptions. The threshold has increased from $455 per week (or $23,660 per year) to $684 per week (or $35,568 per year) for employees in the standard exemptions. The threshold for highly compensated employees has increased from $1,923 per week (or $100,000 per year) to $2,066 per week (or $107,432 per year).

Employers have until Jan. 1, 2020, to comply.

This increase will make 1.3 million workers who previously did not qualify to receive overtime under the Fair Labor Standards Act eligible to receive time-and-a-half pay for hours worked in excess of 40 per week. The increase will also make 101,800 highly compensated employees eligible to receive overtime.

The final rule doesn’t change the salary basis or duties tests for the standard exemption.

FLSA firsts

For the first time, the Department of Labor will allow employers to count a portion of nondiscretionary bonuses, commissions and other incentive payments toward satisfying up to 10% of the salary threshold.

The department also reinforced its commitment to raise the threshold every four years via the rulemaking process, although it acknowledged economic factors may forestall a quadrennial update.

“Today’s rule is a thoughtful product informed by public comment, listening sessions, and long-standing calculations,” said Cheryl Stanton, administrator for the Department of Labor’s Wage and Hour Division. “The Wage and Hour Division now turns to help employers comply and ensure that workers will be receiving their overtime pay.”

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About the Author

Amy Double

Amy, a tenured professional in sales and marketing with over 10 years of experience, is dedicated to creating content focused on helping organizations achieve their business goals. As an experienced writer, Amy is committed to researching and blogging about topics that affect businesses across multiple industries, including manufacturing, hospitality and more. Outside of work, Amy enjoys reading, entertaining and spending time with family.

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