The Fair Labor Standards Act (FLSA), also known as the federal Wage and Hour Law, requires enterprises engaged in interstate or foreign commerce and state and local governments to pay overtime of 11/2 times an employee's regular rate of pay for hours worked in excess of 40 hours in a workweek. The FLSA does not require that overtime be paid for hours worked in excess of 8 hours per day or on weekends or holidays. However, states are permitted to provide workers greater overtime protections than those offered by the FLSA.
DOL’s final overtime rule effective January 1, 2020. The Department of Labor’s (DOL) final overtime rule, effective January 1, 2020, increases the current minimum salary threshold for overtime exemption. Under the final rule, employees would have to earn at least $684 per week ($35,568 per year) in order to be exempt from overtime pay for any hours worked over 40 in a workweek. This is an increase from the current $455-per-week threshold ($23,660 per year).
The final rule also increases the total annual compensation requirement for highly compensated employees (HCEs) from the currently enforced level of $100,000 to $107,432 per year. To be exempt as an HCE, an employee must also receive at least the new standard salary amount of $684 per week on a salary or fee basis (without regard to the payment of nondiscretionary bonuses and incentive payments).
The DOL’s final rule makes no changes to the duties tests required to determine overtime eligibility.
Under the final rule, employers may use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level. If an employee does not earn ...