New Overtime Rule Takes Effect Jan. 1

Date: December 17, 2019

Jan. 1 traditionally is the time to start making good on those New Year’s resolutions, and, unfortunately, it’s also a time for new regulations. Small business owners need to be ready for the changes to federal overtime rule that takes effect at the start of 2020.

NFIB recently held a webinar on the topic with compliance expert who went over everything you need to know about the rule change, including compensation strategies that can help businesses reduce costs associated with the new rule. You can listen to a recording of the webinar presentation here.

But here are the main points you need to know: the minimum salary for the overtime exemption will rise from $23,660 annually to $35,568 annually. That means you’ll have to pay time-and-a-half for executive, administrative, or professional employees who make less than $35,568 for any work done beyond 40 hours per week.

The Department of Labor estimates that the change affects 1.3 million employees, raising the cost of compensation for the affected businesses. The cost would have been a lot higher had NFIB not stepped in with a lawsuit that blocked the Obama administration from raising the overtime threshold salary to $47,476. The new Trump administration increase was meant to be a compromise.

Affected NFIB members should double-check to make sure they are in compliance. The Labor Department found 11,018 overtime rule violations in 2019, forcing payment of millions in back wages. Don’t make a mistake and find yourself on the hot seat.

The full text of the regulation is available here from the Department of Labor. Members who need additional assistance are always welcome to reach out to Beth Milito, Senior Executive Counsel at NFIB’s Small Business Legal Center. Contact her by phone at 202-406-4443 or by email at [email protected]

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