Under the Fair Labor Standards Act, to avoid paying overtime for work performed by “white collar” executive, administrative and professional employees, an employee must satisfy duties’ tests and be paid a salary that meets a weekly minimum threshold. With the new year fast approaching, remember these minimum salary requirements increase. Beginning January 1, 2020, the minimum salary for the overtime exemption increases from $455 per week ($23,660 annually) to $684 per week ($35,568 annually).
After the first of the year, two other overtime changes go into effect:
- Nondiscretionary bonuses and incentives (including commissions) that are paid annually may count towards up to 10% of the salary minimums.
- The minimum annual compensation for the highly compensated employee overtime exemption increases from $100,000 to $107,432.
Now is a good time to make sure the white collar employees you have treated in the past as exempt from overtime will remain exempt after January 1, 2020 under the new rules.