DOL Overtime Rule: New Salary Threshold Announced
Flashback to June of 2016. If you were like most employers, you were left scrambling in a panic, trying to navigate the Department of Labor’s (DOL) recently proposed overtime rule changes. Since that period of uncertainty, a lot has changed. An injunction was passed in November 2016, pressing pause on the much anticipated and highly debated rule, but news broke just this week announcing a new salary threshold. Here’s a recap of the latest and what lies ahead.
New Salary Threshold Announced
On September 24, 2019, the Department of Labor issued its final overtime rule which will increase the minimum salary threshold for overtime exemption from $23,660 per year to $35,568 per year. The new rule will take effect beginning January 1, 2020.
Under the new threshold, nearly 1.3 million workers in the United States will become eligible for overtime pay. According to Wage and Hour Division Administrator Cheryl Stanton, “The rule is a thoughtful product informed by public comment, listening sessions and long-standing calculations.”
Below are other changes outlined in the new rule:
The standard salary level will increase from $455 per week to $684 per week.
The new rule will also raise the total annual compensation level for highly compensated employees from $100,000 to $107,432.
Employers are permitted to satisfy up to 10% of the standard salary level with nondiscretionary bonuses and incentive payments (including commissions) that are paid annually.
What's Next?
While challenges to the rule are expected, employers have a decision to make. Workers that make less than $35,568 annually must either receive a raise to meet the new threshold amount or be paid overtime. The new ruling will impact millions of workers across the country, specifically those in the retail and service industries.
To prepare for January 1, 2020, employers should review their existing compensation policies and practices to ensure compliance.
How Paycor Can Help
With all compliance regulations and impending announcements, stay tuned to Paycor’s Resource Center for updates and any late-breaking announcements.
Subscribe to Our Resource Center Digest
Enter your email below to receive a weekly recap of the latest articles
from Paycor's Resource Center.
Check your inbox
for an email confirming your subscription. Enjoy!
Buyer's Guide To HCM And Payroll Technology
An HCM platform is the foundation of your business, and choosing the technology is one of the most important decisions you'll make.
Get ExpertiseMore to Discover
Paycheck Protection Program (PPP): What You Need to Know About Payroll Protection
You need payroll protection. The federal government wants to help. Here’s what you need to know. The Paycheck Protection Program (PPP) As part of the $2 trillion aid package unveiled in the Coronavirus Aid Relief & Economic Security (CARES) Act, $349 billion was dedicated to the Payment Protection Program (PPP). This offers federal guaranteed loans to businesses with fewer than 500 employees to cover payroll and other essential costs.The federal government is focused on releasing funds quickly and with as little red tape as possible, giving small businesses a big boost right when they need it. And here’s the best part—if you use the funds to retain (or rehire) your employees, the loans don’t need to be repaid.View Payroll Protection...
Paycor's COVID-19 Command Center
We're excited to announce the release of Paycor's COVID-19 Command Center, a new analytics solution that delivers instant insights for crisis management. With the COVID-19 Command Center, you'll be able to: Prepare with real time insights Plan with actionable data Respond with the help of HR experts Recover quickly by playing the long game now Discover how your organization can make the best possible decisions with real time data, actionable insights and expert HR counsel.
Families First Coronavirus Response Act: Tips to Manage Employee Leave Scenarios
Coronavirus Response Act On March 18 the Families First Coronavirus Response Act was enacted to help individuals, families and businesses. The legislation requires employers with under 500 employees to give sick leave and paid family medical leave to eligible employees.Eligible businesses are now able to take advantage of new tax credits to offset the costs associated with paid emergency leave and sick leave benefits implemented under the bill, including credit for health plan expenses affiliated with the new leaves. Below is a list of scenarios your employees may experience during this time. Scenario 1 A full time employee is sick and believes they might have COVID-19. The employee is visiting a doctor to seek a medical diagnosis and...