On January 1, 2020, a new U.S. Department of Labor final rule will extend overtime pay thresholds. The rule raises the standard salary level from $455 to $684 a week, the equivalent to $35,548 per year for full time workers. Employees earning less than the new imposed threshold are eligible for overtime pay of at least time and a half.
The final rule further raises the annual compensation requirement for highly compensated employees to $107,432 per year. The final rule further allows the use of annual nondiscretionary bonuses, incentive payments and commissions to fulfill up to 10% of the standard salary level.
The rule will change the earnings thresholds needed to provide exemption to FSLA’s minimum wage and overtime pay requirements for executive, administrative and professional employees.
Employees Who May Qualify for Overtime Under the New Rule
- Employees receiving a W-2 tax form.
- Hourly wage employees.
- Repetitive, manual labor employees.
- Employees earning less than $35,000 annually
Maryland employers will be affected by DOL’s new rule and should devise a strategy to prepare. Some employers may opt to reclassify their employees to avoid the rise in payroll costs. These employers should provide clear communication with their employees and pay close attention to record keeping including tracking of time, overtime and bonuses.
If your company is facing an impact from the Fair Labor Standards Act’s newest rule, contact Luchansky Millman to schedule an initial consultation.