The Department of Labor has released its update to the federal overtime regulations that they are calling The Final Overtime Rule. These regulations govern which employees receive the minimum wage, and also which employees are able to receive overtime pay under federal wage law. This new set of regulations will be in effective as of January 1st, 2020, and are making some changes that may affect small business owners.
One of the biggest updates of this regulation is the increase of the standard salary level from $455 a week to $684 a week. This level is the minimum amount that must be paid to salaried employees annually in order for an exemption from overtime pay, as long as the employees fall under the executive, administrative, professional, or outside sales category.
In order to meet the standard salary level 90% of the income needs to be paid out on a regular salary basis. While the additional 10% can be paid out by bonus, commission, or incentive payment. For further details on this change in regulation, and to make sure you are compliant for the January start date, please visit the Department of Labor Website or speak with your accountant.