New Overtime Rule could Benefit 1.3-Million White-Collar Employees

As current Department of Labor (DOL) regulations stand, most white-collar employees, i.e. executives (supervisors), administrative employees and professionals, are exempt and need not be paid overtime for workweeks in which they work more than 40 hours if they satisfy the following two conditions: (1) they must perform what the DOL has defined as “exempt” duties and (2) they must receive a minimum guaranteed salary of at least $455 per week or approximately $23,660 annually.

However, a final rule recently announced by the DOL changes the minimum salary requirement. The final overtime rule, which takes effect January 1, 2020, is great news to exempt, white-collar employees as it is estimated to extend overtime protections to more than 1.3 million American workers who are not currently eligible for overtime under federal law.

According to the final overtime rule, the DOL is:

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

Meeting the salary threshold does not automatically make an employee exempt from overtime pay; the employee’s job duties also must primarily involve executive, administrative or professional duties as defined by the regulations.

The DOL information release on its final overtime rule can be found here.

If you find yourself in a situation where you are not paid the lawfully required overtime pay and/or are misclassified as “exempt,” you should consult with attorneys at Lebau & Neuworth, who are experienced in litigating wage-and-hour violation cases. Contact us at (410) 296-3030 or lebauneuworth.com/contact-us.