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Federal Department of Labor adopts new overtime rule

The News Media Alliance reports that the Department of Labor (DOL) published its final rule that will increase the threshold used to determine the exempt status of white-collar employees under the minimum wage and overtime rules of the Fair Labor Standards Act.

The new rule will have little, if any, impact on California newspapers because the state has established its own salary thresholds that are higher than the federal standards.

The final rule raises the threshold from $23,660 per year to $35,568 per year by reverting to the methodology used in the 2004 rule that focused on the 20th percentile of full-time wage earners in the lowest-income region of the country (identified as the South).

Some of the key provisions of the new rule that impact the news industry include:

  • The final rule increases the current salary and compensation threshold for Executive, Administrative and Professional workers to be exempt from overtime, from the current level of $23,660 per year ($455/week) to $35,568 per year ($684/week).
  • The new threshold is pegged to the 20th percentile of full-time wage earners in the lowest income region of the country (identified as the South).
  • The minimum total annual compensation for highly compensated employees increases from $100,000 annually to $107,432 annually.
  • The final rule is effective on January 1, 2020.

In California, the annual salary threshold for exempt employees on Jan. 1, 2020, based on the new minimum wage increase will be $54,080 for workers at businesses with 25 or more employees ($13 per hour). For companies with fewer than 25 employees the annual salary threshold will be $49,920 (based on the minimum wage of $12 per hour).

For more information, please visit the U.S. Department of Labor Wage and Hour Division, Final Rule: Overtime Update.

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