The long-debated updated guidelines from the Department of Labor go into effect on January 1, 2020. Employers should have already evaluated salaried employees to see if the new overtime exemption rules will affect them. As a reminder, the new minimum salary level in order to qualify for an exemption under the Fair Labor Standards Act (FLSA) is increasing from $23,660 ($455 per week) to $35,568 ($684 per week). This means that employees making less than $35,568 per year cannot be exempt from the overtime requirements of the FLSA no matter their job duties. Additionally, the total annual compensation for the “highly compensated employee” exemption will increase from $100,000 to $107,432 per year.
Of course, employers should also ensure that even employees making over $35,568 are performing exempt job duties such that the FLSA is satisfied. Employers with questions about the exempt status of employees are urged to consult counsel since making mistakes in classifications can be extremely costly.