Written by: Raymond J. Sanguinetti

After over three years of deliberations, the U.S. Department of Labor has announced its final rule which could make 1.3 million American workers eligible for overtime pay. This rule is set to go into effect January 1, 2020. If you are an employer, you need to make sure you understand the rule and how it affects your operations.

The new rule provides that:

  • Exempt employees must earn at least $684 per week ($35,568 per year);
  • Highly compensated employees must earn at least $107,432 per year (however, Illinois employers should note this is not applicable in Illinois because Illinois did not adopt the highly compensated exemption); and
  • Under certain conditions, Employers can use non-discretionary bonuses and incentive payments, including commissions, that are paid at least annually to satisfy up to 10% of the required salary levels for exempt employees (however, the minimum salary may be no less than $615.60/week)

The new rule can be found here: https://www.dol.gov/whd/overtime2019/

Employers should review their exempt employees’ compensation to determine whether they meet the new salary requirements for exempt status, and make plans for any necessary adjustments to take effect by January 1, 2020.

Rathje Woodward advises clients on a broad range of employment and labor matters, including compliance, policies and procedures, internal investigations, administrative proceedings, collective bargaining negotiations and disputes, union avoidance policies and litigation defense.  If you have questions about how these new laws may impact your business, contact Emily A. ShupeRaymond J. SanguinettiMark J. McAndrew, or John R. Zemenak at 630-668-8500.

For more information regarding Rathje Woodward’s employment practice and its attorneys, please visit www.rathjelaw.com.