On September 24, 2019, the U.S. Department of Labor (DOL) issued a final rule that will increase the threshold salary requirement necessary for employees to be exempt from minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA).

In most instances, the FLSA requires employers to pay an overtime premium to employees who work over forty hours in a single workweek.  The FLSA provides certain exemptions from overtime pay, such as for administrative, executive, and professional employees who are paid on a salaried basis (the so-called white collar exemptions).  The final rule makes a fairly limited, yet significant, set of changes to the existing requirements.

Under the DOL’s final rule, the standard salary level for exempt employees will increase from $455 per week to $684 per week, which is the equivalent of $35,568 annually (an increase from $23,660).  To meet this threshold, employers will be permitted to use non-discretionary bonuses or incentive payments (including commissions) that are paid at least annually to satisfy up to ten percent (10%) of an employee’s standard annual salary requirement.