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Legal Alert

Are You Ready for the New Year? Ensure You're Compliant with the New FLSA Minimum Salary Requirements Effective January 1, 2020

December 18, 2019

In September 2019, the U.S. Department of Labor (DOL) revised the minimum salary thresholds for the executive, administrative, and professional exemptions under the Fair Labor Standards Act (FLSA). The DOL estimates that 1.3 million workers will become eligible to earn overtime compensation under the final rule.

The final rule, which takes effect on January 1, 2020, implements the following key changes:

  • increases the minimum salary level from $455 per week ($23,660 annually) to $684 per week ($35,568 annually);
  • raises the total annual compensation level from $100,000 to $107,432 for the special rule that applies to "highly compensated employees"; and
  • allows employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the minimum salary level.

The final rule does not impact certain overtime exemptions such as the Motor Carrier Act exemption or the computer-professional exemption. However, any employer who has classified its employees under the executive, professional, or administrative exemptions, or the highly compensated employee exemption, should review their employee salaries to confirm that they are still high enough as of January 1, 2020, to be exempt from overtime under the FLSA.

Please contact Maslon's Labor & Employment Group for help to ensure compliance with these requirements.

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