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Department of Labor Issues Final Overtime Rule

David Weber, PHADA Policy Analyst

On September 24, 2019, the Department of Labor’s Wage and Hour Division (DOL) issued a final rule under the Fair Labor Standards Act (FLSA) implementing changes to the exemptions from minimum wage and overtime pay requirements for executive, administrative, professional, outside sales and computer employees. The new rule takes effect on January 1, 2020.

As reported in the April 17 and May 29 Advocates, DOL published a proposed rule on March 7, 2019, in response to a Texas court invalidating the final rule published by the DOL under the Obama Administration in 2018. That rule, now formally rescinded, more than doubled the salary threshold and made other changes to the definitions of exempt employees that had been in place since 2004.

The new rule establishes a substantially increased minimum salary level and makes other changes allowing certain nondiscretionary bonuses and commissions to count towards the annual salary threshold. It does not, however, make any changes to the duty requirements of the executive, administrative, and professional exemptions. DOL estimates that an additional 1.3 million Americans will now be eligible for overtime pay under the new rule.

 

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