New Year, New Rules: Changes in Mandatory Overtime Pay for 2020 – by Alexa Morris

On January 1, the U.S. Department of Labor’s new mandatory overtime rule went into effect, expanding overtime pay eligibility to up to 1.3 million workers. The new rule raises the salary threshold necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements to $35,568.

Under the previous rule, which has been in place since 2004, only salaried workers making less than $23,660 were entitled to time-and-a-half overtime pay. The rule change is a win for newly-eligible workers, although it covers fewer workers than an earlier 2016 rule proposal which would have set the minimum salary threshold at $47,000. Employers are relieved that the threshold is lower than originally proposed, but companies will still need to pay more in wages to comply with new regulations. Since the new rule expands the pool of workers eligible for overtime pay, it is important for employers to determine how the regulation changes affect their workforce. With the new rule taking effect January 1, it is a good time for employers to analyze employee salaries and job descriptions to verify that workers are properly classified and compensated.

If you have questions about how the new overtime rule will impact your business and what changes your company might have to make to comply with the new rule, contact Sean Keenan or Alexa Morris.