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DOL's New Overtime Rule: Effective in 2020. Beginning January 1, 2020, small businesses will have to comply with a new overtime rule, estimated to affect 1.3 million workers. The new rule requires that exempt salaried employees must be paid at least $684 per week, or $35,568 annually.
Under the Fair Labor Standards Act (FLSA), the new overtime rule raises the pay threshold for exempt workers to $35,568 per year ($684 per week) from its current level of $23,660 per year ($455 per week). This is the first change to the federal minimum salary threshold for overtime pay since 2004.
The Department of Labor just released the final rule that will require businesses to pay overtime wages to a much larger group of employees if they work more than 40 hours a week. That means they get paid 50 percent extra when they work more than 40 hours in a week. The new rule raises the salary threshold to $35,568.
The final rule goes into effect Jan. 1, 2020. Ultimately, more than a million employees will be eligible to receive overtime pay for working more than 40 hours in a week as a result of this change, according to the DOL.
Current federal law says most workers making about $23,660 a year are entitled to overtime pay. In other words, to be considered "salaried," most workers need to make at least that. Starting Jan. 1 next year, that minimum salary threshold will be raised to $35,568.
New Overtime Rule Raises Salary Cut-Off to $35,568 Employees who make less than $35,568 are now eligible for overtime pay under a final rule issued by the U.S. Department of Labor (DOL). The new rate will take effect Jan. 1, 2020.
Employees who are classified as exempt must receive a salary of at least $684 per week by January 1, 2020. For employees reclassified as non-exempt, make sure you pay them at least the minimum wage for all hours worked and overtime whenever they work more than 40 hours in a workweek.
With few exceptions, to be exempt an employee must (a) be paid at least $23,600 per year ($455 per week), and (b) be paid on a salary basis, and also (c) perform exempt job duties. These requirements are outlined in the FLSA Regulations (promulgated by the U.S. Department of Labor).
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