HCAOA The Voice Winter 2019-20

PUBLIC POLICY 19 Winter 2019–20 DOL Issues Final Rule on White Collar Overtime Thresholds ON SEPTEMBER 24, 2019, THE DEPART- MENT OF LABOR issued a final rule updating the earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements. It allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. The new thresholds account for growth in employee earnings since the thresholds were last updated in 2004. HCAOA is pleased the DOL lowered the thresholds for exempt employees from what was proposed by the Obama Adminis- tration, however HCAOA had urged DOL to maintain the $455 per week threshold. In the final rule, the 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 nondis- cretionary 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. The final rule is effective on January 1, 2020.