UPDATE: DOL ISSUES FINAL OVERTIME RULING EFFECTIVE JAN.1, 2020.
The U.S. Department of Labor announced a final rule to make 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act (FLSA).
The final rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses (and commissions) towards meeting the salary level. The new thresholds account for growth in employee earnings since the currently enforced thresholds were set in 2004. In the final rule, the Department is:
The final rule will be effective on January 1, 2020.
Confused About New DOL Overtime Rules? Looking for clarification?
The National Restaurant Association presented a webinar in late May providing initial analysis of the new overtime rules. The webinar was led by attorneys Angelo Amador, senior vice president and regulatory counsel at the NRA, and Alex Passantino, partner at Seyfarth Shaw and former Acting Administrator of the U.S. Department of Labor’s Wage and Hour Division. You can access a recording of the webinar here. Click here for the webinar slides.
The US Department of Labor issued a Small Business Compliance Guide.
DOL issued this blog post describing options for employers:
The Labor Department’s overtime rule simplifies and modernizes the nation’s overtime regulation − to ensure that extra work means extra pay. There is a misperception out there that there is only one way for employers to comply with our new our new overtime rule when they have white-collar employees who earn less than $47,476 per year: change them from salaried to hourly employees. That is just not true.
First, employers have a wide range of options for responding to the changes to the salary level. Employers can choose the one that works best for them. Options include:
Second, based on feedback we heard from the employer community, the overtime rule broadens the definition of salary basis to allow nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary test requirement.
Nothing in the Fair Labor Standards Act – or in the overtime rule – requires the choice between flexible work arrangements or opportunities for career advancement and complying with basic labor standards. There is no requirement that a worker must have a predetermined schedule, and nothing prohibits working whenever, wherever or however the worker and the employer agree.
Finally, although the FLSA requires that employers keep certain records to ensure that workers get paid the wages they earn and are owed, it’s up to the employer to choose the method that works best for them and the needs of their workforce. There’s no requirement that employees “punch in” and “punch out.” Employers have flexibility in designing systems to make sure appropriate records are kept to track the number of hours worked each day.