DOL's New Overtime Rule Released, Updating Earnings Thresholds

Posted by Megan Moritz on Tuesday, September 24, 2019

Today, the U.S. Department of Labor (DOL) released its final rule, updating earnings requirements for exempt treatment under the Executive, Administrative, and Professional (or "EAP") exemptions of the Fair Labor Standards Act ("FLSA").

Under the final rule:

  • The salary level requirement under the EAP exemptions will rise from $455 a week (or $23,660 annually), to $684 (or $35,568 annually). 
  • The total annual compensation for certain "highly compensated employees" also goes up, from $100,000 to $107,432 annually.  
  • Employers will be allowed to use certain non-discretionary bonuses, commissions, and incentive payments that are paid at least annually to satisfy up to 10 percent of the salary level requirement.
  • Certain special salary levels for workers in U.S. territories and in the motion picture industry are also being updated.

The final rule goes into effect on January 1, 2020. The DOL estimates that an additional 1.2 million workers will become eligible for minimum wage and overtime under the FLSA as a result of the changes under the new rule.

If you have questions about how the new rule may impact your business, please contact Megan Erickson Moritz or any of our Employment & Labor Law Practice Group members for more information.