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December 30, 2019

On September 24, 2019, the U.S. Department of Labor announced final rules related to the revisions to the Wage and Hour Laws. These revisions will significantly increase the number of workers that will qualify to be paid overtime at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. The final rule updates the earnings thresholds necessary to exempt executive, administrative and professional employees from the overtime pay requirements. In the final rule, the Department is at a minimum:

Raising the “standard salary level” from the current level of $455 per week (ie, an annual salary of $23,660) to $684 per week or the equivalent of $35,568 per year for a full-time worker.
Raising the total annual compensation requirement for “highly compensated employees” from $100,000 per year to $107,432 per year.

Allowing employers to use “nondiscretionary bonuses and incentive payments” paid annually to satisfy up to 10% of the standard salary level. 

The questions that we need to ask and consider are: Who qualifies for the executive, administrative and professional exemption?, Who qualifies as a Highly Compensated Employee?, How do the bonus payments work?

Below is a link for a reasonable and understandable 4 page summary as provided by the U.S. Department of Labor to answer the questions above and provide some additional understanding of this important matter.


Should you want to discuss the rule changes in more detail and how they affect your individual business, please give us a call.

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