New FLSA Overtime Rules Take Effect on January 1, 2020

The U.S. Department of Labor (“DOL”) has finalized its new rules regarding overtime pay under the federal Fair Labor Standards Act (“FLSA”).  These new rules will take effect on January 1, 2020.

Under the DOL’s final rules:

• The required salary level for exempt executive, administrative, and professional employees will increase from $455 per week (or $23,660 annually) to $684 per week (or $35,568 annually).
• The annual salary threshold for the FLSA’s “highly compensated employees” will increase from $100,000 to $107,432. Under these new rules, employers may include certain incentive payments and non-discretionary bonuses to satisfy up to 10 percent of the salary required to meet the highly compensated exemption. 

In certain states, such as New York, state law has already set the minimum salary levels for exempt, administrative, and professional employees higher than the new salary thresholds in the final FLSA regulations.  Additionally, in other states, such as Connecticut, the FLSA’s highly compensated employee exemption is not recognized.  For employees, however, whose exempt status is governed by the FLSA’s salary levels, employers should review their salaries and ensure that these employees are properly classified in light of the DOL’s new regulations. 

Please do not hesitate to contact any of our attorneys if you have any questions about your company’s compliance with these new regulations.