DOL Issues New Salary Limits for Overtime Exemptions

DOL Issues New Salary Limits for Overtime Exemptions

On Sept. 24, 2019, the U.S. Department of Labor (DOL) announced a new final rule that updates the salary thresholds that some individuals must meet in order to qualify for a minimum wage and overtime exemption under the federal Fair Labor Standards Act (FLSA). The final rule becomes effective on Jan. 1, 2020. The final rule affects the exemptions for executive, administrative and professional (EAP) employees, highly compensated employees (HCEs), employees in the motion picture indutry and individuals who work in various U.S. territories.


ACTION STEPS

The final rule’s Jan. 1, 2020 effective date leaves little time for employers to prepare for the changes. Employers should:

  • Determine which currently exempt employees have salaries below the new threshold; and
  • Decide whether to increase salaries for these individuals or reclassify them as non-exempt employees.

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