Good news! Starting on January 1, 2020, many more people will qualify for overtime under the federal Fair Labor Standards Act (“FLSA”)!
A new United States Department of Labor regulation takes effect January 1, 2020, and it changes the “salary basis test.” This test is important because the most common “exemptions” from the FLSA are the “white collar exemptions” - the administrative, professional, and executive exemptions. These exemptions all require that for an employee to be exempt they must meet the “duties test” (discussed briefly here) and the “salary basis test.”
Before 2020, the “salary basis test” means, among other things, that you have to be paid a salary of at least $455 per week (works out to about ~$24,000 annually).
Starting January 1, 2020 the new salary basis test requires that you make at least $684 per week.
That works out to about ~$36,000 annually.
Practical meaning—
What does this mean for employees? More people are going to be protected from oppressive working conditions. No more 80 hour weeks for $25,000 per year with no overtime.
Starting January 1, 2020 if make less than $684 per week in gross (pre-tax) wages, you do not meet the salary basis test. This means that most* employees making less than ~$36,000 per year will be entitled to minimum wage and overtime protection under the FLSA.
If you make less than $684 per week and work more than 40 hours a week, your employer should require you to report your hours, and should pay you time-and-a-half for hours over 40 - even if you’re salaried.
How do I figure out if I’m owed overtime?
The Department of Labor’s Wage and Hour Division puts out some helpful “Fact Sheets” about overtime that often distill the issue down to 2 - 3 pages, sometimes with helpful examples. That’s a great first place to check!
The most relevant fact sheet for most people is this one here.
Even with that helpful fact sheet, the complexity and details can be dizzying even to those experienced with the FLSA.
If you a) work more than 40 hours in some (or all) weeks, and b) you are not paid overtime, and c) you make less than $455 per week in 2019 and before or $684 per week after January 1, 2020, you may be owed overtime compensation.
Ramsland Law is here to help with a free consultation for overtime, minimum wage, and exemption issues!
*some exemptions, like the “outside sales” exemption, do not require that the salary basis test be met. These sorts of details ought to be talked through with an experienced employment attorney.