The final rule regarding overtime for so-called “white collar” workers has returned. Yesterday, the Department of Labor (DOL) issued a Final Rule to Update the Regulations Defining and Delimiting the Exemptions for Executive, Administrative, and Professional Employees. The new regulations will go into effect on January 1, 2020.

Under the new regulations, it is estimated that 1.3 million workers will be affected by this rule. It updates the threshold at which executive, administrative, and professional employees are eligible for overtime pay. The rule also addresses the use of non-discretionary bonuses and incentive payments (including commissions) in meeting the threshold.

Key provisions of the final rule
The final rule updates the salary and compensation levels needed for workers to be exempt in the final rule:

1. raising the “standard salary level” from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
2. raising the total annual compensation level for “highly compensated employees (HCEs)” from the currently enforced level of $100,000 to $107,432 per year;
3. allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices; and
4. revising the special salary levels for workers in U.S. territories and in the motion picture industry.

Additionally, the Department intends to update the standard salary and HCEs total annual compensation levels more regularly in the future through notice-and-comment rulemaking.

The previous final rule was invalidated just before it was to take effect in 2016.

Read the DOL announcement.

Read the final rule. 

Read more in this issue of Colorado Green NOW:
Three strategies to navigate the labor shortage
BestYard expands into seasonal lighting retail
Colorado Springs Utilities to host meetings about updating water shortage ordinance
New guidance provided by DOL on compliance issues