The laws around overtime change regularly. In 2020, there are additional changes that may affect your business or employees. The overtime threshold has been changed again, so what does that mean for your business. Here is a closer look at the current employment laws surrounding overtime and what you need to know.
Minimum Salary Threshold
The new threshold went into effect on January 1st of this year. Under the Fair Labor Standards Act (FLSA), the new rule raises the pay threshold for overtime for exempt workers to $35,568 annually. That is $684 per week. That’s a significant jump from the current level of $23,660 per year or just $455 weekly. According to the DOL, this gives more than a million employees a chance at earning overtime for working more than 40 hours per week.
Bonuses, Incentives, and Commissions
In some cases, this new rule on overtime will also allow companies to include additional earned income such as non-discretionary bonuses, incentive payments, and commissions, all of which have to paid at least annually, to satisfy up to 10% of the standard salary level. This can be an important consideration for both employers and their employees making these kinds of bonuses or commissions.
Exempt Vs. Non–Exempt
It’s always a good idea to readdress the concept of exempt versus non-exempt in the workplace. This overtime rule, for example, only affects employees classified as exempt. Non-exempt employees are protected by the FLSA in terms of overtime pay. Prior to changes in these thresholds, exempt employees would not necessarily be paid additionally for hours over 40 each week.
Talk with a Staffing Partner
One way to better understand the requirements, and to make the right hiring decisions for your company, you may want to talk with a staffing agency that specializes in your industry. They can help you with short and long term placements that can allow you to meet your staffing and financial goals in 2020.
About Anserteam Workforce Solutions
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