Breaking news from the Department of Labor, effective 1/1/2020 the minimum salary for exempt employees will increase to $35,568. Employees who earn less than that on an annualized basis are eligible for overtime compensation. Here are some other key things for you to know as you prepare to make this change:
• “Compensation” can include 10% of the amount to come from commission and bonus
• The new highly compensation salary level for non-exempt employees is now $107, 432.
In addition, the DOL has stated that they will review the non-exempt pay levels on a more consistent basis going forward. Need help implementing this change, here are some things to consider:
• Pull data for exempt workers earning below the threshold
• Review budgets, and consider what positions might need restructuring
• Identify positions you might reclassify to nonexempt or give a salary increase
• Weigh the cost of raising employee salaries above the new threshold against the cost of reclassifying employees as nonexempt and paying overtime
• Forecast financial ramifications for changes in labor costs necessitated by changes in the rules
• Consider when, practically speaking, you should implement changes
Need help? We are your HR team, contact us for the information you need.