U.S. Department of Labor Issues Final Overtime Rule

Written on .

On September 24, 2019, the U.S. Department of Labor announced its long-anticipated Final Rule on exemptions and overtime under the Fair Labor Standards Act (FLSA).  The new rule takes effect January 1, 2020.

Unlike its Obama-era predecessor, which was challenged in court and enjoined by the U.S. Court of Appeals for the Fifth Circuit, the new Final Rule is more of an update than a reinvention of the regulatory structure.  It increases the salary thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker).  It also allows employers to count a portion of certain nondiscretionary bonuses and commissions towards meeting that salary level:  this will allow an employer to “catch up” an employee’s earnings at year end so the employee qualifies for the exemption. The total annual compensation level for highly compensated employees (HCE) is increased from the currently-enforced level of $100,000 to $107,432 per year.  Long-standing exemptions for teachers, lawyers, and other professionals remain unchanged.

The new salary thresholds basically just reflect growth in employee earnings since the current thresholds were last updated in 2004.  Similar revisions to special salary levels allowed for workers in U.S. territories and in the motion picture industry also are included.  Detailed information about the final rule is available at https://www.dol.gov/whd/overtime2019/.

What does this mean for you?  Now is the time to take a look at your current payroll.  Make sure that salaried, exempt employees’ earnings meet or exceed the new $684/week threshold: but know that if you fall short, you may be able to make it up to them at year end (that will be December 2020) with a bonus.  Also check any “highly compensated” employees to be sure they are meeting or exceeding the new $107,432 level. 

Comment:  Unlike the previous Administration’s proposal, which sought to completely revamp the rules for overtime pay, this Final Rule should not pose difficult compliance problems.  As always, we will be happy to work with you to ensure that your questions are answered and that you can confidently plan and execute compensation policies in accordance with the law.

Questions?  Need more information?  Call Larry Stine at 404-365-0900.

Get Email Updates

Receive newsletters and alerts directly in your email inbox. Sign up below.

Recent Content

microphone, indoors

Union Organizing Efforts across the Country Continue to Draw Attention

Recent Gallup polls indicate that the public has a favorable opinion of unions with a near record high of 68%, and with the "great resign...
supreme court of the united states

Supreme Court Explains Limits to Arbitration Exceptions to Court Litigation

A majority of employees in the U.S. are now covered by individual arbitration agreements prohibiting them from bringing lawsuits in court...
bullseye target, darts

10 Things That Might Make Your Company an Attractive Target to a Plaintiff's Lawyer

Wimberly & Lawson attorneys Kathleen Jennings, Paul Oliver, and Jim Wimberly conducted a webinar on June 2, 2022, dealing with the ab...
person completing documents, indoors on a table with a mug

Employer Wins Lawsuit over Background Checks Even Though It Failed to Show Applicant Copy of the Report

The Fair Credit Reporting Act (FCRA) places a number of obligations on employers who use third-party background or credit check companies...
interview between a man and woman indoors

E17: The Bad Job Interview

In this episode, host Thom Jennings and attorney Kathleen Jennings discuss a Reddit post about a job interview that went terribly wrong. ...
  • Home
  • Alerts
  • 2019
  • U.S. Department of Labor Issues Final Overtime Rule

Wimberly, Lawson, Steckel, Schneider & Stine

3400 Peachtree Road, Ste 400 / Lenox Towers / Atlanta, GA 30326 /404.365.0900

Where Experience Counts


Thank you for visiting the firm's website. Please note that this website is intended for general information purposes only and does not constitute an offer of representation or create an attorney-client relationship with the firm. The firm welcomes receipt of electronic mail but the act of sending electronic mail alone does not create an attorney-client relationship. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include the firm's copyright notice.

© 2022 Wimberly, Lawson, Steckel, Schneider & Stine P.C. | Site By JSM