Federal Salary Level for “White Collar” Minimum Wage and Overtime Exemptions Set to Increase on January 1, 2020

On September 24, 2019, the U.S. Department of Labor announced a new final rule that will, for the first time in 15 years, increase the salary threshold necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements. Effective January 1, 2020, the “white collar” salary level will increase from $455 per week ($23,660 annually) to $684 per week ($35,568 annually). In addition, the total annual compensation level for highly compensated employees (HCEs) to be exempt from the FLSA’s minimum wage and overtime requirements will
increase from $100,000 to $107,432 per year on the same date. As a result, white collar employees earning less than $35,568 and HCEs earning less than $107,432 will become eligible for overtime under the FLSA on January 1, 2020.  The Department of Labor expects that these changes will cause an estimated 1.3 million workers to become newly entitled to overtime protection. In determining whether a white collar employee or HCE meets the salary requirement, the new rule allows employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level.  READ MORE