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Department of Labor Changes Overtime Pay

By Andrew A. Kimler, Esq.

Today, the U.S. Department of Labor (DOL) announced a final overtime rule, making 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act (FLSA). The rule will take effect January 1, 2020.


The final rule updates the federal earnings thresholds for exempting an executive, administrative, or professional employee from FLSA minimum wage and overtime pay requirements. It further allows employers to count a portion of certain bonuses and/or commissions toward meeting the salary level.

The DOL stated that the new thresholds account for growth in employee earnings since the currently enforced thresholds were set in 2004.

In the final rule, the DOL is:

  1. Raising the "standard salary level" from the currently enforced level of $455 to $684 per week—equivalent to $35,568 per year for a full-year worker.
  1. Raising the total annual compensation level for "highly compensated employees" from the currently enforced level of $100,000 to $107,432 per year.
  1. Allowing employers to use nondiscretionary bonuses and incentive payments—including commissions—that are paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices.
  1. Revising the special salary levels for workers in U.S. territories and in the motion picture industry.

NEW YORK STATE THRESHOLDS

While the new federal thresholds represent a significant increase, please note that the New York State law exemption applies to such individuals who are paid as follows:

NYC: Large employers (11 or more employees)

  • $1,125.00 per week on and after Dec. 31, 2018

NYC: Small employers (10 or fewer employees)

  • $1,012.50 per week on and after Dec. 31, 2018
  • $1,125.00 per week on and after Dec. 31, 2019

Nassau, Suffolk, and Westchester

  • $900.00 per week on and after Dec. 31, 2018
  • $975.00 per week on and after Dec. 31, 2019
  • $1,050.00 per week on and after Dec. 31, 2020
  • $1,125.00 per week on and after Dec. 31, 2021

Remainder of NYS (outside NYC, Nassau, Suffolk, and Westchester)

  • $832.00 per week on and after Dec. 31, 2018
  • $885.00 per week on and after Dec. 31, 2019
  • $937.50 per week on and after Dec. 31, 2020


We'll continue to update you with developments.

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