On Sept. 24, the U.S. Department of Labor (DOL) announced a final rule, which updates the earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s minimum wage and overtime pay requirements and allows employers to count a portion of certain bonuses or commissions toward meeting the salary level. The final rule will be effective on Jan. 1, 2020.

The DOL is updating both the minimum weekly standard salary level and the total annual compensation requirement for “highly compensated employees” to more accurately reflect growth in wages and salaries. The new thresholds account for growth in employee earnings, since the currently enforced thresholds were set in 2004. The DOL believes that the update to the standard salary level will maintain the traditional purposes of the salary level test and will help employers more readily identify exempt employees. The DOL is also revising the special salary levels for employees in U.S. territories and the special base rate for employees in the motion picture producing industry.

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