It’s Baaaacck! New Overtime Rule Starts January 2020!

By Attorney Kelly Rains Jesson

Back in July of 2016, we wrote about the Department of Labor’s dramatic new proposed overtime rule, which frightened a lot of business owners. A few months later, a judge invalidated the law, and the 2004 law has been in place ever since.

The new law is back, but a little less dramatic.

Everyone is somewhat familiar with the law that requires overtime to be paid to employees who work over 40 hours per week.  However, the law exempts any employee employed in a bona fide executive, administrative, or professional capacity.  This exemption is premised on the belief that these types of salaried employees generally earn higher salaries and enjoy other benefits.
 
The change in the 2020 law applies to the exception to this exemption – if a person is a salaried employee and employed in an executive, administrative, or professional capacity, they will still be entitled to overtime under federal law if they earn a “low” salary. Currently, an employee in this category who earns less than $455/week or $23,660 is entitled to overtime if they work more than 40 hours per week.

Starting January 1, 2020, these figures will increase.  If an employee in this category earns less than $684 per week (equivalent to $35,568 per year for a full-year worker), they will be entitled to overtime if they work over 40 hours per week.
 
If you are a business owner and employ employees who may be affected by the change in the new law, we encourage you to contact an attorney or other human resource professional to ensure you comply with the law. There are other changes in the overtime law that may affect you and your business. More information can be found here.