In 2016, many of us reviewed our workforce to ensure compliance with a Department of Labor proposal which would have substantially increased the minimum salary threshold for a job to be considered exempt from overtime pay. After much work by HR teams across the country, the new minimum threshold was not implemented.
Now, three years later, a similar yet less costly change is proposed.
Let me explain. When a job description is written, it is used to review the Fair Labor Standards Act (FLSA) criteria to determine if an employee in that job should be paid overtime when he/she works more than 40 hours in a work week.
The other part of the equation is to look at the minimum salary level for employees in that job. Today, if a job is determined to be exempt based on the FLSA criteria, as long as the weekly pay is $455 or more (and there is no deduction for quantity or quality of work), the employee is exempt from overtime pay.
The Department of Labor is now reviewing a new minimum threshold of $679 per week. If this is approved, and indications are that it will be, this new salary minimum, or overtime threshold, for exempt employees could be effective sometime in 2020.
If you would like to discuss if or how this affects you and your staff, contact me at [email protected]. Late summer or early fall is the perfect time to review jobs and pay so you are prepared for the new regulation in 2020.