Fair Labor Standards Act Update: What You Should Know

The US Department of Labor passed a new final rule on September 24, 2019 that updates the Fair Labor Standards Act (FLSA). The new rule changes the way in which certain employees are considered for minimum wage and overtime exceptions.

The new changes will be effective starting on January 1, 2020. Here are the main changes:

  • The standard salary level will be raised from $455 per week to $684 per week. This will equal to a $35,568 salary for a full year worker.
  • Annual compensation requirements for highly compensated employees will be raised to $107,432 per year. Originally, it was set at $100,000.
  • Employers will now be able to use non discretionary bonuses and incentive payments – which includes commissions – to satisfy up to 10% of the standard salary level.
  • Revisions will be made for special salary levels motion picture industry workers and US territory workers.

How will this new rule effect your business and your employees? The timing for these changes give little time for companies to prepare. Compliance with the law is important! Do not wait until the final minute to make the necessary adjustment for your company.

Contact XCEL and speak to our Human Resources experts to help guide you through these changes!