2020 Ushers in Long-awaited Update to Overtime Pay Regulations

2020 Ushers in Long-awaited Update to Overtime Pay Regulations

Workers in the United States recently saw the first update to overtime eligibility salary levels in 15 years. Effective, January 1, 2020, this final rule under the Fair Labor Standards Act (FLSA) brings the following threshold changes to the salary and compensation levels to receive overtime pay:

  • raising the “standard salary level” from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker)
  • raising the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year
  • allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices
  • revising the special salary levels for workers in U.S. territories and in the motion picture industry.

The Department of Labor (DOL) has advised that this change means that an estimated 101,800 workers will now be eligible for overtime pay.

Questions about this new rule and how it might affect your company’s payroll? We are happy to help. Call 215-723-4881 or contact us online.

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