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Fair Labor Standards- UPDATE

Fair Labor Standards

The Federal Department of Labor just released its draft rules on the proposed new minimum annual salary for employees who are exempt from the overtime requirements of the Fair Labor Standards Act (FLSA). Under the proposed changes, the minimum annual salary for overtime exempt employees would increase from its current level of $23,660 to $35,308.

In addition, the proposed rule would:

  • Increase the total annual compensation requirement for “highly compensated employees” (HCE) from the currently-enforced level of $100,000 to $147,414 per year

  • Include a commitment to periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking

  • Allow employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10% of the standard salary level

Next Steps

The DOL is allowing a 60 day public comment period on the proposed regulations. After that ends, they will respond to comments and determine if any changes will be made before issuing a final rule. As of now, the DOL projects that the new regulations will take effect in January 2020.

Rick Maher


Turning Point HCM

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