The Fair Labor Standards Act (FLSA) requires that certain workers in the United States receive time-and-a-half overtime rates for hours worked over eight in a day or 40 in a week. Some employees can be exempt from this requirement, and one factor for exemption is that a worker must earn a salary above a specific threshold. This threshold has long been $455 per week, which comes out to $23,660. If someone earns less than this amount, they are eligible for overtime rates.
The minimum salary for overtime exemption has not been updated for a long time – until now. The Department of Labor (DOL) announced a final rule that updates this minimum salary starting on January 1, 2020. With the New Year comes the requirement that employers pay anyone earning less than $684 per week ($35,568 per year) overtime rates for extra hours worked.
This can be a major change for many companies, as they might have numerous employees earning between $455 and $684 per week that now will need to receive overtime payments. The DOL estimated that about 1.2 million people would become eligible for overtime, and employers need to be ready to begin making these payments on January 1st. There is not a grace period to adjust to the new overtime rule, so companies need to update payroll now to be ready. Employees should know their rights when it comes to overtime and hold employers accountable if they do not meet the new standards under the law.
At the Yudien Law Firm, P.C., we handle a wide range of employment matters, including unpaid wages and overtime. If you would like to discuss any concerns about your compensation, call 925.472.0600 or contact us online to speak with a Walnut Creek employment attorney.