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Wednesday, 09 October, 2019

DOL Minimally Raises White-Collar Overtime Pay Salary Threshold

Managers, assistant managers, supervisors, professionals, or administrators who are exempt from earning overtime pay might be able to earn overtime pay at the start of the new year if they still make less than $35,568 a year.

A general principle of overtime law is that all employees are presumed to be entitled to overtime pay. Employers can exclude employees from receiving overtime pay only if they satisfy the law’s “job duties test” for the claimed exemption AND they are paid on a salary. Being paid a salary does NOT make you exempt from receiving overtime pay. To exclude an employee from receiving overtime, an employer must pay an employee a salary AND the employee must perform the high level job duties performed by executive, professional or administrative employees. These tests have different rules and considerations for the different categories of white-collar workers, but there is one test with a new change that will be important for those employees making less than $35,000 a year. Under this test, regardless of what job duties an employee performs, he or she is entitled to overtime pay at the rate of one and one-half their regular rate of pay.

 This change will take place effective January 1, 2020. Employers are required to:
1. Create a new overtime payment plan for workers that are now non-exempt
2. Change the status of these now non-exempt employees from being paid salary to being paid hourly, which would put them back into the exempt category 

The affected workers – those earning less than $35,568 – must be paid overtime. As noted above, it doesn’t matter if you are paid on a salaried basis, regardless of your job duties or job title, you are entitled to overtime pay!

It is essential that employees know about their eligibility for overtime pay because in some cases, businesses will knowingly misclassify their employees or simply not comply with the new rules with the hope that no one realizes they are breaking the law.  If that happens, employees have a right to sue in court and to recover liquidated damages in addition to backpay on their claims and to recover attorneys’ fees and costs.

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