Momentum - Business to Business Online Magazine MOMENTUM November 2019 | Page 32

HR CORNER NICOLE BELLOW, DBA, MBA, SPHR, SHRM-SCP Sr. Human Resources Consultant Smarter HR Solutions, LLC 713-999-1205 | [email protected] www.smarterhrsolutions.com Final OVERTIME LAW Announcement! H aving gone through quite a few prior revisions, on September 24, 2019, the United States Department of Labor (DOL) announced its final rule that will make nearly 1.3 million American workers newly eligible for overtime pay under the Fair Labor Standards Act (FLSA) beginning January 2, 2020. This will be the first update to the overtime regulations in over 15 years. The DOL’s final rule updates the earnings thresholds mandatory to exempt an executive, administrative, or professional employee from the FLSA’s minimum wage and overtime pay requirements and will allow employers to count a portion of their employees’ certain bonuses (and commissions) towards meeting the salary level. Currently, the salary threshold for an exempt employee is $23,660, however, January 1, 2020, the threshold will increase to $35,568. That means that if an employee is an exempt employee and is paid a salary less than $35,568, that employee will be eligible for overtime pay. There will not be a grace period extended to employers to comply with the new overtime rule. Please be aware that employees must be classified properly – either non-exempt (hourly employee) or exempt (salaried employee) but both must meet the classifications and guidelines established by the DOL (www.dol.gov). If you have employees or clients with employees that have exempt employees who may be affected by this new rule, it is prudent to run scenarios to decide whether the employee(s) should be salaried at their current salary level and paid overtime 30 MOMENTUM or increase their salary to the new salary threshold of $35,568. The final rule: · will raise the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for full-year workers); · will raise the total annual compensation requirement for “highly compensated employees” from the current annual compensation of $100,000 to $107,432 annually; · will allow employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at last annually to satisfy up to 10% of the standard salary level, to comply with the new rule, with “catch- up payments” allowed; and · will revise the special salary levels for workers in the motion picture industry and the United States territories. We recommend that you get prepared and take action to comply and not idly stand by. This rule affects small businesses to large corporations.