New Overtime Rules Finalized

Employees who make less than $35,568 a year are eligible for overtime pay.

HR professionals and employers have been awaiting the final overtime rules update since the proposed rule in 2016.  The 2016 proposal presented a salary basis that was economically challenging for many businesses, especially non-profits and small business owners.

As of January 1, 2020, exempt employees earning less than $684.00 per week or ($35,568 annually) will be eligible for overtime pay for hours worked in excess of 40 hours in any given week under the newly released rule.  In addition to changing the threshold for exempt employees the new rule increases the salary threshold for a highly compensated employee from $100,000 per year to $107,432.

With just three (3) months’ notice to prepare employers should immediately begin:

  • Reviewing existing salary of exempt employees to ensure they meet the minimum threshold.  Non-discretionary bonuses may be used to satisfy up to 10% of the standard salary level.
  • Reviewing positions classified as exempt from overtime to ensure responsibilities meet the criteria to be exempt.
  • Discussing with management teams about how the organization will handle salary adjustments that are necessary to be compliant.
  • Discussing with management on how to communicate this information to employees.

This new rule takes effect in only a few months.  If you have questions or need assistance determining which employees meet the threshold, contact the professionals at HR Synergy to help you navigate through the process.

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