The U.S. Department of Labor announced a new rule on September 24, 2019 that raises the minimum threshold salary for exempt employees. If you have any questions about how this new rule will affect your overtime entitlement, you may contact our Columbus Ohio Overtime Lawyers.
The Prior Rule
Under the prior rule, the minimum salary required to be guaranteed and paid for exempt employees was $455 per week. This equaled $23,660 per year. It is important that the required salary was guaranteed regardless of the number of hours an exempt worked in a workweek. In addition to the minimum threshold salary being merely $455 per week, the prior rule also defined “highly compensated employees” subject to that specific exemption as any employee that earned a total annual compensation of $100,000 or more (which includes the $455 minimum per week).
The New Rule
Under the new rule, the minimum salary required to be guaranteed and paid for exempt employees will be $684 per week. This new threshold is equal to $35,568 per year. In addition, the highly compensated employee threshold is to be increased to $107,432 per year, including $684 per week. Under the new rule, employers are now entitled to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the standard salary level ($35,568). Finally, special salary levels were set for worker in U.S. territories.
How does the new rule affect employees’ overtime entitlement?
The New Rule is not effective until January 1, 2020, so it is always possible that it could be challenged in the same way that the prior rule was challenged and never became effective. However, assuming that the new rule becomes effective, it will only affect exempt employees. The affect is likely even smaller because it will only affect those employees earning a salary of less than $35,568 per year (or $684 per month). For those employees, their employers will be required to increase the employees’ salary to meet or exceed the “standard salary level” or the employees will be entitled to overtime pay since meeting the minimum threshold is a requirement of the exemption.
The New Rule will not affect employees who are non-exempt in any way. Instead, the New Rule merely affects the minimum level at which exempt employees must be paid to qualify as exempt. Whether an employee is exempt from overtime or non-exempt and entitled to overtime varies based on the employees’ primary job responsibilities and their pay.
Contact Experienced Columbus, Ohio Overtime Lawyers
At our firm, we are experienced with assisting employees with all types of pay issues, including misclassification, failure to pay overtime, failure to pay for all overtime hours worked, failure to pay overtime at the proper rate of pay, and many more. Our Columbus Ohio Overtime Lawyers are here to assist you with any questions you have about your entitlement to overtime pay. We will fight for your right to be paid properly and fully for your hard work. Contact our team for a free consultation regarding your right to overtime compensation.