On Tuesday September 24, 2019, the Department of Labor (DOL) issues new guidance regarding the definition of “exempt” workers. As you may remember, this discussion began in 2016 and focused around the minimum pay that an employee needs to earn to be considered “Exempt”. Being exempt means that the employer does not need to pay overtime, among other benefits.

While there are a number of criteria that must be met in order to classify an employee as “exempt”, employees earning less that $684/wk ($35,568 annually) (or the equivalent hourly rate for part-time employees) may not be considered exempt, therefore requiring employers to pay overtime along with providing the other benefits on being non-exempt. It should be noted that non-discretionary and incentive payments may be included in the calculation of annual wages. This new rule will take effect on January 1, 2020.

If you have not done so recently, this would be a good time to review your employee’s classification and to identify any employees that may be affected by this new salary threshold. The classification of exempt vs. non-exempt workers continues to be a difficult process. If you are unsure of the classification, please either contact me or another HR Professional. Do not try to get the answer from Google!

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