Happy New Year to all of our clients and friends. In welcoming in 2020, please keep in mind that beginning January 1, 2020, the new salary threshold that must be met by salaried exempt employees will be $35,568 annually, or $684 weekly. Any salary exempt employee making less than this new threshold will be considered hourly and entitled to overtime pay for any hours worked in excess of 40 in any workweek.
In addition, the highly compensated employee exemption is increased from $100,000 per year to $107,432 per year. Also, the new rules allow employer to use nondiscretionary bonus compensation and incentive payments to pay up to 10% of the new exempt salary threshold.
If you haven’t yet determined which employees will be impacted by the new law, you must do so as soon as possible and prior to the first paychecks issued in 2020. If a current exempt salaried employee falls under the new threshold, you must either increase her salary to the new threshold or otherwise inform her that she is now classified as non-exempt and will be entitled to overtime pay. She must further be instructed to follow the work rules applicable to your non-exempt, hourly employees.
Please contact any of the employment and labor attorneys at RBS with any questions relating to the new overtime rule and any other wage and hour compliance issue.