Early this year, the Department of Labor announced the minimum salary to be exempt from overtime pay will be $646 per week, or $35,568 per year. Any of your employees that earn less than that must be paid overtime if they work more than 40 hours in a week.
But those aren’t the only people that have to be paid overtime–if you don’t meet the “duties test” you need to be paid overtime as well. (That part didn’t change.)
Why is the number so weird?
If you were pulling a number out of the air, you’d probably pick a rounded number–$35,000 a year or $650 per week. But this number is based on the 20th percentile of salaries, which is the same way the Department of Labor calculated the numbers the last time the limits were changed–in 2004. This is a safe way to pick the number, as the courts struck down an Obama era change that was much higher and not based on the same standard.
To keep reading, click here: New Overtime Rules Start 1 January 2020. Are You Ready?
I noticed that the article recognized that the fact that this was based on an hourly wage, which in certain locations will be mandated as $15.00/ hour minimum as of December 31,2019. So if you do the math, figuring that a salaried employee is expected to work a 45/ hour work week that figure salary is equal to the lowest level possible. In those areas that have the mandated $15/ minimum wage, salary employees will be making more than that, especially since their employees are all making $15/ hour and these salary employees will need a bit extra to take on the responsibility of both working the hours and the supervisor position over employees who earn $15/ hour for much less responsibility. Before this correction was made to the minimum salary level which now bases the level adjustment on the minimum wage in area, there was no way to adjust salary to be complacent with the law.