On Tuesday, the U.S. Department of Labor issued its final rule concerning overtime exemptions. The rule increases the salary threshold for employees exempt under the executive, administrative, and professional exemptions (the “white collar exemptions”) from $455 per week (or $23,660 annually) to $684 per week (or $35,568 annually). Additional changes include:
- Increasing the total annual compensation threshold for highly compensated employees (“HCEs”) from $100,000 per year to $107,432 per year;
- Permitting employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the increase salary threshold; and
- Committing to updating the salary threshold more regularly.
The new rule is set to take effect on January 1, 2020 and increase the number of overtime-eligible employees by 1.3 million. No changes to the duties test have been made.