Do your employees meet FLSA’s UPDATED earnings thresholds, necessary to exempt employees from overtime pay? The Department of Labor (DOL) issued a final rule this week concerning overtime eligibility for white collar employees. Effective Jan 1st, the salary-level threshold for white-collar exemptions increases from $455 a week to $684 a week.
The Department of Labor (DOL) issued a final rule this week concerning overtime eligibility for white collar employees. Effective Jan 1st, the salary-level threshold for white-collar exemptions increases from $455 a week to $684 a week.
Bottom line, it is the employer’s duty to demonstrate that an employee qualifies as an exempt employee.
The final rule updates the earnings thresholds necessary to exempt employees from overtime pay, those classified as executive, administrative and professional staff, from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements. According to the FLSA, non-exempt employees must receive no less than one and one-half of their regular pay rate for work performed over a 40-hour work week.
Keep in mind, to claim a non-child dependent’s medical expenses you must make DIRECT payments to the medical service providers, not simply reimburse your parent for the expenses. These medical expenses include, but are not limited to, health insurance premiums (the non-child dependent must have their own medical insurance and cannot be a dependent on your medical plan), out-of-pocket medical expenses, co-pays, deductibles, etc. Qualified long-term care (LTC) insurance premiums are also eligible, subject to age-based limits.
In recognition of evolving pay practices, the DOL said non-discretionary bonuses and incentive payments paid at least annually may be used to satisfy up to 10% of the standard salary level.
Now is a great time to look at your employee’s work duties to ensure they are meeting the required exemption criteria per the “duties tests” as there are multiple factors to be considered.
The total annual compensation requirement for “highly compensated employees” was also addressed to better reflected growth in wages and salaries, according to the DOL. The total annual compensation requirement was raised from $100,000/year to $107,432 per year. Employees meeting this salary level have a more relaxed duties test to pass.
Bottom line, it is the employer’s duty to demonstrate that an employee qualifies as an exempt employee. Remember it is the content or duties of the job that determine proper classification under the FLSA, not an employee’s title or salary alone.
Blue Chip Benefits recommends you visit one of the following websites to become familiar with the regulation changes headed our way January 1, 2020.
For more information, go to: https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/FLSA-Overtime-Rule-Resources.aspx or https://www.dol.gov/whd/overtime2019/overtime_FAQ.htm Or contact us at Team@BlueChipBG.com or (888) 225-8244.