What are the significant changes to the Fair Labor Standards Act (FLSA) overtime regulations for most white-collar salaried workers?
Author: Deborah J. Tibbetts, Esq.
The most notable changes to the overtime regulations for white-collar exemptions under the FLSA include the following:
- Salary threshold. The minimum salary level for most overtime-exempt employees increases to $47,476 annually ($913 per week) from the current $23,660 annually ($455 per week).
- Incentive pay. Up to 10 percent of the salary minimum may come from nondiscretionary bonuses, incentive payments and commissions, paid at least quarterly, with a provision allowing an employer to make a catch-up payment each quarter if an employee's average weekly salary falls below the minimum.
- Highly compensated employees. The minimum compensation level required to meet the separate highly compensated employee exemption increases to $134,004 per year from $100,000 per year. Of that amount, at least $913 per week must be paid on a salary basis.
- Computer employees. The minimum salary that must be paid to overtime-exempt computer employees increases to $913 per week from $455 per week, but the existing alternative hourly rate of $27.63 is left intact.
- Tri-annual adjustments. The minimum salary levels will be automatically adjusted every three years, with the first update taking effect on January 1, 2020.