Effective January 1, 2020
Because of the Fair Labor Standards Act, employees are entitled to an overtime rate of 1 and 1/2 times their regular hourly rate if they have exceeded their 40 hour work week. This policy does not apply to employees that’s position meets the guidelines of the executive duties test, the administrative duties test, or the professional duties test.
- Executive Duties Test: Essential job functions must meet regulated criteria.
- Salary Test: Workers must profit a weekly salary ($455 until January 1st).
- Salary Test: Employees MUST be paid their full salary amount for any week that they perform work.
During the month of September, the U.S. Department of Labor announced the final decision regarding raising the minimum salary an employee must withhold to be exempt from standard overtime. Thus, making employees with greater salaries eligible for OT compensation through their employer. This greatly changes the amount an employee must earn to not qualify for overtime:
- Current status: $455 per week
- Status Beginning in 2020: $684 per week
- From an annual standpoint, this is an increase from $23,600 to $35,568.
The DOL predicts that 1.3 million people working individuals will now become eligible for minimum wage/overtime pay.
What does this mean for your business?
As an employer, this new rule could greatly effect the way you run your organization. It is important to potentially implement new steps for your business – and do so by January 1, 2020. Most importantly, it is important that you communicate these changes with your employees – this, too, could greatly impact the way they work.
For more information visit The U.S. Department of Labor’s website