On September 24, 2019, the U.S. Department of Labor (DOL) announced the final Fair Labor Standards Act (FLSA) overtime regulations. It is expected to be in the Federal Register on Friday, September 27, 2019.

The final rule includes nearly all of the recommendations that IAAPA and its coalition partner, the Partnership to Protect Workplace Opportunity (PPWO) offered during the comment period.  PPWO is a coalition that consists of a diverse group of associations, businesses and other stakeholders representing employers with millions of employees across the country.

Key provisions of the final rule include:

Salary Threshold – Raises the threshold from $23,600 to $35,568/year ($684/week) by reverting to the methodology used in the 2004 rule that focused on the 20th percentile of full-time wage earners in the lowest income region of the company (identified as the South) as well as the retail industry. 

Future Salary Updates – Does not implement automatic updates.

Duties Test – Makes no changes to the duties tests. 

Highly Compensated Employees – Sets the new threshold at $107,432.

Salary Test – Would allow nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary test requirement, with a single pay period to make any “catch up” payments. 

Effective Date – January 1, 2020.

To read the DOL’s announcement, click here. To read the final ruling, click here.