The new year brought major changes regarding pay for employees across the country with the implementation of the Department of Labor’s new overtime rule on January 1, 2020. As the first overtime update made by the federal government in 15 years, the new rule caused more than one million previously-ineligible employees to become eligible for overtime pay.
Prior to the new overtime rule, an employee, otherwise meeting exempt status (e.g. being classified as a white-collar exemption), would only have to be paid $455 per week on a salary basis to be exempt from overtime. With the new rule, employers must now pay exempt employee salaries at the rate of at least $684 per week, or $35,568 per year for a full-year worker.
The Department of Labor’s new overtime rule also changed the definition of a “highly compensated” employee by raising the total annual compensation level. Now, an employee is considered “highly compensated” if he or she makes $107,432 versus the previous $100,000.
Also under the new rule, employers may use non-discretionary bonuses and incentive payments (including commissions) as an offset against the threshold amount by as much as 10%, but the payment must be made annually.
If you find yourself newly eligible for overtime pay, but not receiving the compensation you are entitled to, or you are experiencing any other pay disadvantages regarding the new 2020 overtime rule, contact The Schipper Law Group here or call us at (248) 729-2414. Our team is up-to-date on the latest pay updates for the New Year, and we will work with you to ensure you are being compensated fairly and in line with the new changes.
