Back in March 2019, we advised that the U.S. Department of Labor announced a proposed rule that would change the minimum salary threshold for the so-called “white collar exemptions.” On September 24, 2019, the U.S. Department of Labor issued its long awaited final rule on overtime.
The final rule revises the earnings thresholds used to exempt executive, administrative, or professional employees from FLSA’s minimum wage and overtime requirements by raising the salary threshold from $455 per week ($23,660 annually) to $684 per week ($35,568 annually). Nondiscretionary bonuses and incentive payments (including commissions) may account for up to 10 percent of the minimum salary level under the rule, while discretionary bonuses would not count toward the exemption threshold. Further, the threshold for the “highly compensated employee” exemption is also increased under the rule (from $100,000 to $107,432), but Connecticut does not recognize this exemption, so employers should not rely upon it for employees in this state.
Now that the new rule has been issued, employers will need to either raise salaries of affected employees to ensure they meet the threshold or begin treating these employees as non-exempt. Employers have little time to adjust, however, as the new rule takes effect January 1, 2020.
Our team of labor and employment attorneys can assist employers in adjusting to the new white-collar exemption requirements and ensuring compliance with all applicable labor and employment laws. Contact us to arrange a wage-and-hour self-audit for your organization.