DOL Issues New OT Rule Setting FLSA Exemption Threshold At $35K
On Tuesday, September 24, 2019, the United States Department of Labor (DOL) released its long-awaited final overtime rule to replace the Obama administration’s controversial salary thresholds required for workers to qualify for the “white collar” exemptions under the federal Fair Labor Standards Act. The new threshold is $35,568 per year ($684 per week), which is about $12,000 per year more than the current threshold of $23,660 but about $12,000 lower than the threshold that had been set (and ultimately invalidated) under President Obama. The final rule allows up to 10 percent of the salary threshold to be met by nondiscretionary bonuses and incentive payments (including commissions), provided these payments are made at least annually. The final rule does not make any changes to the “duties test.”
In addition, the final rule increases the minimum salary threshold for the “highly compensated employee” from $100,000 to $107,432. Pennsylvania employers should note, however, that Pennsylvania does not recognize this exemption.
Prior to making any changes in an effort to comply with this new rule employers should consult with experienced human resources professionals and/or labor and employment counsel. For MEA members, the Hotline and a Member Legal Services attorney are available to provide this assistance.
Amy G. McAndrew, Esquire
Director of Member Legal Services
MidAtlantic Employers’ Association
*This Alert is provided for general informational purposes only and does not constitute legal advice.