Are You Ready for the New Overtime Rule?

Effective January 1, 2020, employees covered by the Fair Labor Standards Act (FLSA) are entitled to overtime pay.

Overtime Rule Banner

The U.S. Department of Labor announced a final rule change in September that will make an additional 1.3 million working Americans eligible for overtime pay. Beginning January 1, 2020, employees now covered by the FLSA must receive overtime pay for hours worked in excess of 40 during a single workweek of at least one and one-half times their regular pay rates.

The rule change includes an update to the earnings thresholds necessary to exempt executives, administrative, or professional (EAP) employees from the FLSA’s minimum wage and overtime pay requirements.

It also allows employers to count a portion of certain bonuses and commissions towards meeting the new salary standards. In the final rule, the Department of Labor is:
• 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)
• Raising the total annual compensation level for "highly compensated employees" from the currently-enforced level of $100,000 to $107,432 per year
• Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level As an employer, it’s critical that your credit union takes proactive steps to assess the impact the new rule will have on your employees prior to January 1, 2020.

Read more from CUNA Mutual Group’s Risk Alert: Increase in Minimum Salary Threshold Effective January 1, 2020.