new overtime rules

US Department of Labor Announces Final Rule on New Salary Levels for White-Collar Overtime Exemptions

By Patricia W. Goodson, D. Beth Langley and Jessica Thaller-Moran, Brooks, Pierce, McLendon, Humphrey & Leonard LLP

On 24 September 2019, the United States Department of Labor (DOL) released its final Overtime Rule, which increases the minimum weekly salary threshold for white-collar positions exempt from overtime. According to the Final Rule, the new minimum weekly salary for white-collar exempt positions will increase from USD 455 to USD 684 (or USD 35,568 annually).

Other key changes include:

  • The Highly Compensated Executive (“HCE”) minimum annual compensation level increases from USD 100,000 to USD 107,432.
  • Employers may include nondiscretionary bonuses and incentive payments (including commissions) that are paid as frequently as annually to satisfy up to 10% of the minimum required salary level.
  • The DOL has stated its intention to review and update the salary levels through rule- making on a more frequent basis.

The final Overtime Rule is effective 01 January 2020. The DOL estimates that 1.3 million currently exempt employees will become non-exempt as a result of the new rules.

The DOL’s published “Frequently Asked Questions” are available on their website: https://www. dol.gov/whd/overtime2019/ overtime_FAQ.htm.

It is important for employers to review the classification of employees to ensure compliance with the new rules. If current exempt employees do not meet the new salary threshold, employers will need to either 1) increase the employee’s salary to meet the threshold, or 2) reclassify the employee as nonexempt and pay overtime for any hours worked in excess of 40 hours. There are a variety of ways to meet this overtime pay requirement for salaried, non-exempt employees.

Brooks Pierce employment attorneys regularly assist businesses and HR professionals in staying compliant with ever-changing regulatory requirements.


Patricia W. Goodson

Patricia W. Goodson

GGI member firm
Brooks, Pierce, McLendon, Humphrey & Leonard LLP
Law Firm Services
Greensboro, Raleigh, and Wilmington, (NC) USA
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D. Beth Langley

D. Beth Langley

GGI member firm
Brooks, Pierce, McLendon, Humphrey & Leonard LLP
Law Firm Services
Greensboro, Raleigh, and Wilmington, (NC) USA
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Jessica Thaller-Moran

Jessica Thaller-Moran

GGI member firm
Brooks, Pierce, McLendon, Humphrey & Leonard LLP
Law Firm Services
Greensboro, Raleigh, and Wilmington, (NC) USA
T: +1 919 839 03 00
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: www.brookspierce.com
 


Published: GGI Insider, No. 104, November 2019 l Photo: New Africa - stock.adobe.com

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