Friedman Group
  • About Us
    • Careers
    • Privacy
  • Services
    • Business
    • Employee Benefits >
      • Share To Compare
    • Financial Services
    • Personal
    • Specialty Insurance
  • AP Blog
  • Pay Online
  • Contact
  • About Us
    • Careers
    • Privacy
  • Services
    • Business
    • Employee Benefits >
      • Share To Compare
    • Financial Services
    • Personal
    • Specialty Insurance
  • AP Blog
  • Pay Online
  • Contact

Welcome to The Friedman Blog

New overtime exemption regulations take effect January 1, 2020

11/11/2019

 
New overtime exemption regulations
New federal overtime regulations have been introduced for non-exempt workers after years of wrangling over the issue.

Under the new rule, employers will be required to pay overtime to certain salaried workers who make less than to $684 per week - or $35,568 per year - up from the current threshold of $455, or $23,660 in annual salary.
​

The new regulations are a midway point from Obama administration rules that would have seen the salary cap increased to $47,476, a move that was blocked by a court after protests from the employer community in December 2016.

Because the Trump administration took over after that, it decided not to pursue an appeal of the judge's orders. It instead started working on replacement regulations that appeased the employer community, which had protested the doubling of the cap as too costly for businesses. 

The Fair Labor Standards Act requires that most employees in the United States be paid at least the federal minimum wage for all hours worked, and overtime pay at not less than time and one-half the regular rate for all hours worked over 40 in a workweek. However, the law includes exemptions for certain workers, as long as they satisfy a certain salary threshold. 

Under the final rule issued by the Department of Labor, executive, administrative, professional, computer, or outside sales employees who make more than $684 a week are exempt from the FLSA's minimum wage and overtime pay requirements. The new regulations also allow employers to count a portion of certain bonuses (and commissions) towards meeting the salary level. 

The new rule takes effect on January 1, 2020.

Here are the tests that must be satisfied to categorize workers as exempt if they make more than the new threshold (remember, merely giving someone a job title without these responsibilities does not make them exempt): 

Executive employees
​
  • Managing the enterprise, or managing a department or subdivision of the enterprise;
  • Directing the work of at least two or more other full-time employees or their equivalent; and
  • Authority to hire or fire other employees, or have significant input in hiring, firing, and promotions.
Administrative employees
  • Office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and
  • Exercise of discretion and independent judgment with respect to matters of significance.

Professional employees
  • Work requiring advanced knowledge that is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
  • The advanced knowledge must be in a field of science or learning; and
  • The advanced knowledge must be acquired by a prolonged course of specialized intellectual instruction.

Computer employees

Computer employees include computer systems analysts, computer programmers, software engineers, and other similarly skilled workers in the computer field. To be categorized as exempt if making more than the new threshold, workers must be involved in:
  • Application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
  • Design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
  • Design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
  • A combination of the above.

Outside sales employees
  • Making sales or obtaining orders or contracts; and
  • Engaged away from the employer's place(s) of business. 

Highly compensated employees

The overtime threshold for "highly compensated" employees is also rising - to $107,432 per year, from the current $100,000. This means that employees who are not considered exempt as in the above occupations, and who earn less $107,432 starting next year, will be eligible for overtime if they work more than 40 hours a week.

Get current now

Here is a checklist of action items you should address immediately:
​
  • Check whether your salaried employees satisfy the duties and salaries components of the FLSA white-collar exemptions (or your state law).
  • Identify all of the positions that will require reclassification under the new rule, and decide whether it is worth it to increase someone's salary.
  • Analyze the financial impact of reclassifying employees as non-exempt.
  • Consider reassigning certain tasks to reduce the effects of the rule.
  • Make plans to conduct reviews regularly - like every three years for federal law compliance, or more frequently in California ahead of minimum wage changes.

Comments are closed.

    Categories

    All
    Compliance
    COVID 19
    Cyber
    Employee Benefits
    Personal Insurance
    Property Casualty
    Risk Management
    Wellness
    Workers Compensation

    Archives

    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018

The Friedman Group
501 Bell St.
Dubuque, IA 52001
Phone: (563) 556-0272
Home
Business Insurance
Employee Benefits
Personal Insurance
Financial Services
Contact

AssuredPartners
An AssuredPartners Agency
In February 2020, The Friedman Group joined AssuredPartners, the 11th largest insurance brokerage in the U.S. This partnership provides us access to additional capital and a national footprint that enables us to continue to negotiate the most favorable coverage terms and conditions for our clients, and allows us to provide an even broader spectrum of risk management support services. ​
© 2022 The Friedman Group, Inc.  Privacy Policy.