On Sept 24th, the US Department of Labor (DOL) released a new rule, increasing the minimum salary level for exempt status to $35,568 per year for a full-time employee, effective January 1, 2020.
Read the full law, here: DOL Overtime Rule Change
The proposed rule creates the following changes:
- Raises the minimum salary for an exempt administrative, professional, or executive employee to $684 per week or $35,568 per year
- Raises the minimum salary for an exempt “highly compensated employee” from $100,000 to $107,432
- Permits employers to include some non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the minimum salary requirement
- Allows employers to make a one-time “catch up” payment to an employee whose annual salary will fall short of the new minimum in some circumstances
The consequences of such a conversion can be serious for the unaware employer. Most employers do not track
hours worked by exempt employees.
For assistance in assessing whether employees are properly classified, reclassifying employees, or implementing a
compliant bonus or commission system, please contact Innovative Benefit Planning.
This Compliance communication is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
