New Federal Overtime Rules

January 1, 2020

The first major change in federal overtime rules in over 15 years took effect January 1, 2020. The recent change, which was implemented by the U.S. Department of Labor (“DOL”), increased the salary test for overtime eligibility under the federal Fair Labor Standards Act from $23,660 to $35,568 or $646 per week.  According to the DOL, the change is estimated to make about 1.3 million more people eligible for time-and-a-half pay when they work more than 40 hours in a week.

Although the DOL has changed the salary threshold for eligible overtime, the DOL rule does not change the current duties test for the four categories of exempt employees from the federal Fair Labor Standards Act. The four categories that can exempt an employee from the federal Fair Labor Standards Act, even if the employee makes equal to or less than $35,568 or $646 per week are employees with the status of Manager, Professional, Administrative Professional, and Outside Sales employees.

In addition to the change in the salary threshold, for the first time, the DOL will permit employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the salary requirement on an annual basis.

For more information on the change in federal overtime rules or how it may affect you or your business contact the attorneys at Rock Fusco & Connelly, LLC.