Employees Making Less than $684 Per Week Will Be Eligible for Overtime Pay Rates
Over 1.3 million workers stand to gain overtime pay under FLSA’s new “Final Rule,” which goes into effect on January 1, 2020. Eligible workers who clock more than 40 hours in one workweek must be paid time-and-a-half for the extra hours. Previously, employers could exempt anyone earning more than $455 per week ($23,660 for a year of full-time work) from receiving a special overtime rate. Now, the FLSA has bumped the exemption threshold to $684 per week ($35,568 for a year of full-time work).
This move will put nearly $300 million more in workers’ pockets next year. As the first increase in 15 years, the new rule has a large amount of ground to make up. “Standard salary,” calculated based on 20th percentile earnings in the lowest-paid census region and/or in the retail industry, is used to identify the wage threshold. To avoid future adjustments of this size, the FLSA plans to re-calculate the standard salary every 4 years moving forward, rather than allowing 15-year gaps between updates.
More Clarity for More Workers
The new rule also provides clear-cut lines for workers considered non-exempt based on the standard duties test. Trying to understand the technical language of the test can be difficult. For workers whose salaries fall under the new threshold, it will be much easier to see where overtime pay is owed—and which team members aren’t being compensated fairly. For employers who do not wish to pay overtime to non-exempt employees, the easiest way out is to raise wages above the standard salary.
Wasn’t the Wage Threshold Just Updated?
During the Obama administration, the Department of Labor (DOL) attempted to double the threshold for overtime exemptions. However, many businesses challenged the rule in court, where it was blocked for effectively negating the need for the standard duties test. The DOL’s new proposal contains a lesser increase in an attempt to avoid court challenges and setbacks.
Local changes have helped employees as the courts questioned the validity of the previous increase. In 2017, Colorado passed a law updating the minimum wage and exemption limits for all employees in the state. Businesses must abide by both federal and state worker protections, so in lieu of timely FLSA updates, local workers may receive the support they need.
Wage Theft Is Against the Law
If your employer doesn’t pay you according to legal requirements and contractual agreement, they are committing wage theft. This can happen in any industry and to workers at any wage level. It includes:
- Failing to pay overtime rates to non-exempt employees
- Expecting employees to put in hours “off-the-clock”
- Failing to pay at least minimum wage
- Refusing a final paycheck to a worker who has left
- Misclassifying employees as independent contractors to sidestep regulations
We Can Help You Fight for Fair Compensation
If you are a salaried worker and are paid less than $35,000 per year, please contact our experienced team of wage attorneys for a free consultation. We can help you identify and build a case against all types of wage theft. In a world where employers have high expectations and offer low rewards, we want to help you advocate for the wages you’re entitled to.