Are you an employee who earns under $35,568 a year? As of September 24th, 2019, final rulings have been released under the Trump Administration and the US Department of Labor that mandates all employees under specific brackets will be paid for their overtime.

In the final rulings, all Departments have decided:

  • Increasing normal annual income, above $35,568 for HCE (Highly Compensated Employees or white-collar workers). HCE will be exempt from this new ruling of mandatory overtime compensation. The HCE salary will go from $100,000 annually to $107,432 per year since the HCE will not be paid for overtime hours. 
  • Prior to this new law, mandatory salary for employees (non-HCE) have changed from $455 per week to $684 per week which is equivalent to $35,568 per year, allowing room for over-time compensation.

Find out more here:

HCE (Highly Compensated Employee/(s))

According to the Fair Labor Standards Act (FLSA): in order to be excluded from this bracket, and be a part of HCE, employees must be paid at least $35,568 per year OR MORE and pass specific requirements under review with your employers such as:

  • The employee’s main job description includes performing skilled management experience with hiring and firing qualifications and management of two or more people, but not limited to these exceptions.
  • In the event that employees are paid less or do not meet the tests, they must be paid 1 ½ times the normal hourly rate for overtime of 40 hours in the work week.
  • The employee must perform the above on a daily work schedule OR at least one of the official exempt duties of an executive/supervisor, administrative, or a specialized profession.

Fair Labor Standards Act (FLSA)

What is the Fair Labor Standards Act? A federal law which oversees to working standards such as minimum wage, overtime pay eligibility, recordkeeping, and child labor laws that affect full-time and part-time workers in the federal, state, and local governments.

How Does this Affect Employees and Employers?

While mandatory overtime pay is a great requirement for the millions of American workers, this also raises a lot more company costs of increasing overtime employees and the HCE (Highly Compensated Employees). Employers will need to carefully track and assign all employees according to government standards, double-check that all time-keeping programs are up-to-date, and further consult law details. The HCE might also have some questions as to salary bonuses and increases they might receive to compensate for their overtime thresholds. Whether you are a HCE or not, you should speak to your employers about payment restructuring around this new law, as overtime rules are due to be modified again at a later date. This is a great time to have your employers review your job duties and evaluations too!

Basically, everyone’s salaries are going up like the economy, (hopefully)! Be sure to check with XL Pro Staffing & Consulting about these changes in your company. We are always adapting and giving you the latest updates and careers! What do you think? XL Pro would love to hear from you. Please follow, like, comment and share us!

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