The Fair Labor Standards Act (FSLA) overtime rule regarding overtime provides the guidelines employers must follow for figuring out if employees are exempt from being paid overtime and figuring out if they qualify for overtime. Employees are categorized for overtime as either Exempt Employees or Nonexempt employees. For employees who are Exempt, they are in this category because of their pay rate (high) and work performed (management, department head, supervisor) and they do not qualify for overtime pay after 40 hours worked during a workweek. For employees who are Nonexempt, they are in this work category because of their pay rate (hourly) and type work or position) (not management, department head or supervisor) so they do receive overtime pay at a pay rate of time and half for worked hours in excess of 40 hours during a workweek.
The U.S. Department of Labor has presented an increase for nonexempt for white-collar employees’ salary-level minimum to go from $23,660 to $35,308 annually. When this goes through the rule, if approved, will place overtime protections on an additional 1,000,000 U.S. workers that right now under the federal law for overtime are not eligible to be nonexempt employees.
Employees who are not exempt covered by the Fair Labor Standards act by law are required to be paid a minimum of time and one-half of their standing hourly pay rate on hours worked in excess of 40 hours during a workweek.
Just because and employee meets or exceeds the
FLSA overtime threshold for exempt employees does not mean they are an exempt
employee by default from receiving overtime pay. The employee’s job responsibilities
have to be high-level employee categorization including supervisor, manager, or
an executive as defined by the employment regulations covering non-exempt
For employers and their company’s Human Resource professionals, it is mandated by law they know the facts and the threshold rules regarding overtime laws, and they must learn how to figure out if an employee is overtime eligible or not.
Proposed rule facts and requirements under the U.S. Labor Department exempt salary threshold proposed rule change beginning Mar. 7, 2019:
- Employees not earning a minimum of $35,308 per year (this figure works out to $679 a week) are required to be paid overtime, regardless if they are categorized at an employer as an executive, manager or professional
- Income coming from incentive payments (Commissions included) and unrestricted bonuses paid out each year or more often under the new rules can be included in the totals compiled to meet up to 10% of the new standard salary level.
- For workers earning a minimum of $147,414 total yearly pay would come under a special rule for well paid employees (with a weekly minimum pay or fee requirement $679)
- Specific U.S. territories and employees from the motion-picture industry under the new rules will have certain distinct salary amounts
- Under the new rules there will be not be any built-in duties changes.
- The new proposed rule is set to start in January 2020.
- The U.S. Department of Labor has communicated it will most likely set out a change (increase) in the threshold for salary on a 4-year cycle to make certain the salary level keeps up with a logical relative test for exempt overtime employment positions for employees in the United States. Increases for salary threshold will assessed every 4 years by the U.S. Department of Labor, and not increased as a matter of course.
When it comes to following the overtime rules of the Fair Labor Standards Act it makes good sense to consider using an online payroll processing service so your company stays in compliance, such as Albuquerque, NM’s Payroll Company payroll processing services.