Face Challenges Confidently


Thursday, September 26th, 2019

by: Allison L. Davis and Brittany K. Taylor

On Tuesday, September 24, 2019, the Department of Labor issued the final overtime exemption rule, setting the new annual salary threshold for the executive, administrative, and professional exemptions at $35,568 (or $685 per week). This is an increase from the current salary level of $23,660.00 (or $455.00) per week. However, the new salary level test is significantly lower–$12,000 lower—than the Obama administration’s proposed salary threshold of $47,476.

The DOL also increased the annual salary threshold for highly compensated employees to $107,432 from the current $100,000 requirement. Employers may use nondiscretionary bonuses and incentive payments, including commissions, paid annually or more frequently, to satisfy up to ten percent (10%) of the standard salary level.

The new overtime exemption rule does not affect the job duties tests for the executive, administrative, and professional exemptions. The new rule will take effect January 1, 2020. The Department of Labor estimates this increase will affect 1.2 million employees across the United States.

Over the course of the next few months, the new rule will likely be challenged by coalitions of business groups, management lawyers, and workers’ advocates. However, employers should be prepared to comply beginning on January 1, 2020. Employers in need of assistance in order to comply with the new overtime exemption rule should contact an attorney experienced in employment law.

Allison L. Davis, J.D. and Brittany K. Taylor, J.D. are members of Brown & Fortunato’s Labor and Employment law team, where Allison is a shareholder. They represent clients in a wide range of employment litigation, pre-litigation, and counseling matters, including employment discrimination, non-competition disputes, wage and hour issues, and business disputes. The Employment Law team at Brown & Fortunato can be reached at 806-345-6300. Or contact Allison directly at adavis@bf-law.com or Brittany at btaylor@bf-law.com.