Overtime Rules: US Labor Department Issues Final Rule Hiking Salary Threshold for Exempt Employees

Latham & Watkins LLP

New US Labor Department regulation, to take effect January 1, 2020, raises the minimum base salary for exempt employees to US$35,568.

Key Points: The new regulation:

..Increases the minimum base salary for exempt employees under the Fair Labor Standards Act (FLSA) from US$455 to US$684 per week

..Increases the minimum annual compensation required to qualify for the FLSA’s “highly compensated employees” exemption from US$100,000 to US$107,432

..Allows up to 10% of the minimum base salary to be paid through nondiscretionary bonuses and incentive payments

..Does not provide for automatic periodic increases to the salary level

..Formally rescinds the enjoined 2016 final rule that would have doubled the current minimum base salary for exempt employees.

Please see full publication below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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