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A reminder that the Department of Labor ruled, effective January 1, 2020, that employees earning less than $35,568 must now be classified as non-exempt, which means they will be eligible for overtime pay.

It’s important to note that the new rule states non-discretionary bonuses, commissions, and other incentive-type payments paid annually or more frequently may be used to satisfy up to 10 percent of the standard salary level.

Additionally, the new rule raises from $100,000 to $107,432 the threshold for highly compensated employees, keeping in mind that $684 must be paid weekly on a salary or fee basis.

For the FLSA’s executive, administrative and professional exemptions, called “white-collar exemptions”, employees must perform certain duties and earn at least the salary threshold. Under a special rule, highly compensated employees are eligible for exempt status if they meet a reduced duties test as follows:

  • The employee’s primary duty must be office or nonmanual work.
  • The employee must “customarily and regularly” perform at least one of the bonafide exempt duties of an executive, administrative or professional employee.

Employers should note that the rule doesn’t make any changes to the duties tests.

To ensure you are prepared for these changes, employers should be engaging the assistance of an HR Professional.

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