Here’s What You Need to Know About Overtime Pay Rules

- The U.S. Department of Labor’s final rule, making 1.3 million American workers newly eligible for overtime pay, took effect on Jan. 1, 2020. Here’s what you need to know about the changes and where to find compliance assistance resources.

The final rule updates the earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s minimum wage and overtime pay requirements and allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. Specifically:

  • The “standard salary level” is now $684 per week (equivalent to $35,568 per year for a full-year worker).
  • The total annual compensation requirement for “highly compensated employees” is now $107,432 per year.
  • Employers are allowed to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices.
  • The special salary levels for workers in U.S. territories and the motion picture industry have been updated.
A number of tools and resources to help employers and workers understand their rights and responsibilities, including a fact sheet, answers to frequently asked questions and more, are available at the Wage and Hour Division’s webpage for the final rule.

Read more.

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