Get Ready For January 1 FLSA Income Threshold Increase Impacting Overtime Pay Exemptions

Beginning January 1, 2020, only employees earning at least $684 per week (equivalent to $35,568 per year for a full year worker) can qualify for payment on a salaried basis as employees exempt from the Fair Labor Standards Act (“FLSA”) minimum wage and overtime requirements under the “White Collar Exemption” for executive, administrative, professional, outside sales, computer employees and at least $107, 342 per year to qualify as exempt from the minimum wage and overtime requirements as a “highly compensated employee” (“HCE”). The final rule also includes a new ability for employers to count some incentive compensation when determining compensation of an employee for purposes of the White Collar Exemption, but not the HCE Exemption.

As the Department estimates that these changes will cause more than 1.3 million additional workers to qualify for minimum wage and overtime pay, employers who treat any employees as exempt from FLSA overtime, minimum wage and recordkeeping requirements based on the FLSA White Collar or HCE Exemption should reconfirm their continuing qualification and take other protective steps in preparation for the final rule change on January 1. Read more about what employers should do to respond at https://wordpress.com/posts/slphrbenefitsupdate.com.