Dept. of Labor Approves New Overtime Rule

Sept. 24, 2019

The final rule increases the level of salary needed for an overtime pay exemption.

September 24, 2019—The U.S. Department of Labor finalized a new rule that will change who is eligible for overtime pay.

Building on recommendations released earlier this year, the Department will raise the salary threshold needed to make an employee exempt from overtime pay under the Fair Labor Standards Act. The new salary level is $35,568 per year or $684 per week. That's up from the current level of $23,660 per year or $455 per week.

The new rule also makes some changes to the qualifications for highly compensated employees and the use of commissions, bonuses and incentive payments toward the "standard" salary level.

The Department says that the new salary level could open up overtime pay for 1.3 million workers.

"For the first time in over 15 years, America's workers will have an update to overtime regulations that will put overtime pay into the pockets of more than a million working Americans," Acting U.S. Secretary of Labor Patrick Pizzella said in a press release. "This rule brings a commonsense approach that offers consistency and certainty for employers as well as clarity and prosperity for American workers."

Salary isn't the only factor to qualify for an overtime exemption. There is also the duties test, which determines whether or not the worker's job is administrative, executive or professional in nature. 

The new rule takes effect on Jan. 1

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