1.3 Million Additional Employees May Become Eligible for Overtime in 2020

By: Marcia L. DePaula

Published: October 9, 2019

The United States Department of Labor (“DOL”) recently published its final rule hours worked over 40 during a workweek, unless the employee is exempt. In general, to be exempt from overtime, an employee must satisfy a salary basis test, a duties test, and a salary threshold test. The final rule increases only the salary threshold for exemption.

The key provisions of the final rule include:

The final rule takes effect on January 1, 2020. Employers should audit their workforces well in advance of that date to determine whether compensation or job duties adjustments should be made.

The DOL acknowledged that “fixed earnings thresholds become less effective over time” and that “lengthy delays between updates necessitate disruptively large increases.” Employers should be prepared for updated salary thresholds from the DOL, potentially every four years.

If you have any questions about the DOL’s new rule or how it might affect your business, please contact the authors of this alert

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