Global Compliance Desk – United States

Overtime Pay Update

The U.S. Department of Labor has declared a final rule to make 1.3 million American workers qualified for overtime pay under the Fair Labor Standards Act (FLSA). 

The final rule updates the earnings thresholds required to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements, and permits employers to count a part of certain bonuses/commissions towards meeting the salary level. In the final rule, the Labor Department is:

  • Raising the “standard salary level” from the currently enforced level of $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 level of $100,000 per year to $107,432 per year;
  • Allowing employers to use non – discretionary 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.

Certain employees are not subject to either the salary basis or salary level tests (for example, doctors and lawyers). The Department’s regulations also provide an exemption for certain highly compensated employees (HCEs) who earn above a higher total annual compensation level ($107,432 under this final rule) and satisfy a minimal duties test.

The final rule is effective on January 1, 2020.

Shreya Bhattacharya
ABOUT THE AUTHOR
Shreya Bhattacharya
A labor and employment lawyer at Replicon who specializes in global compliance. Replicon provides award-winning products that make it easy to manage your workforce. Replicon is an industry leader in global compliance and has a dedicated team which pro-actively monitors international labor regulations for ensuring proper adherence with specific country rule requirements.
Get started today.
Set up a free trial based on your business needs. Start Free Trial

Global Compliance Desk – Malaysia

Malaysia Employment Amendment Bill 2021 - Key Amendments to the Employment Act 1955 The Malaysian Senate (Dewan Negara) introduced an Employment Amendment Bill, 2021 (Amendment Act) on March 30, 2022,…Read More

Global Compliance Desk – European Union

Recent Developments in Europe on Time Off Requirements Europe is witnessing a lot of developments in terms of leave benefits available to employees. Read on as we briefly cover the…Read More

5 Reasons Why You Should Be Integrating Your Accounting Software With Time Tracking

Time is the most valuable factor for any business organization. However, keeping track of employee time and project progress is one of the most challenging tasks for businesses today. To…Read More

Using shared services? These five technologies are a must

As organizations continue to scrutinize operating costs and look for areas to drive efficiencies, shared services centers (SSCs) are a no-brainer. The concept of a multi-function SSC has been around…Read More

Employee time tracking is dead

iBeacons, Bluetooth Low Energy, Proximity sensing and the obsolescence of time tracking as we know it. Businesses have to track the time their employees work for a variety of reasons,…Read More

Reducing Absenteeism with Effective Time Management and Absence Tracking

Workplace absenteeism is a major concern for American companies. According to the US Bureau of Labor Statistics, unplanned absences cost American businesses an average of 2.8 million workdays every year,…Read More
  • Polaris
  • Time & Project Insights
  • Time & Projects Solutions
  • Replicon Products
  • Replicon Users
  • Enterprise Time Tracking
  • Thought Leadership
  • Cloud
  • Corporate
  • Professional Services Management
  • Shared Services Management
  • Time and Attendance Management
  • Customer Feature
  • Time Intelligence
  • Industry News
  • Global Compliance Updates
  • Others