September 25, 2019
DOL announces final rule for thresholds for White Collar Exemption
Note: The information in this guide is not intended as legal advice. You should seek specific legal advice before acting with regard to the subjects mentioned herein
The U.S. Department of Labor (DOL) has released a final rule, effective January 1, 2020, updating the regulations governing which executive, administrative, and professional employees ("white collar" workers) are entitled to the minimum wage and overtime pay protections of the federal Fair Labor Standards Act (FLSA).
Current Rules
The current federal rules provide an exemption from both the FLSA minimum wage and overtime pay requirements for bona fide executive, administrative, and professional employees who meet certain tests regarding their job duties and who are paid on a salary basis at not less than $455 per week ($23,660 per year).
- "Highly-compensated employees" (HCEs) who are paid total annual compensation of $100,000 or more and meet certain other conditions are also deemed exempt.
Key Changes
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The final rule raises the salary threshold from $455 a week to $684 per week (or $35,568 annually) for a full-year worker.
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It raises the highly-compensated employee (HCE) total annual compensation level to $107,432.
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It allows employers to use nondiscretionary bonuses, incentives, and commissions paid at least annually to satisfy up to 10% of the standard salary level.
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It revises the special salary levels for workers in U.S. territories and the motion picture industry.
Keep in mind that when both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law.
For more information, please refer to the DOL's website on the final rule.
