On again, off again overtime rules are finally on again.

Way back in 2016 we told you of new overtime rules the Department of Labor (DOL) was proposing, to begin December 1st that year.  Then, at the 11th hour, a Texas judge issued a temporary injunction, prompted by a suit brought by twenty-one states and multiple organizations.   Had you forgotten about the proposed changes?  Our government didn’t.  Finally, three years later, the DOL has released its final ruling, which will take effect January 1, 2020.The good news for employers is that the new rules are more modest than the 2016 legislation which set the annual salary of an exempt (from overtime pay) employee at $47,476.  The good news for employees is that they will no longer qualify as exempt for a mere $23,660 per annum.Beginning in January, 2020 the minimum salary requirement for administrative, professional, and executive exemptions will be the equivalent of $684 per week (or $35,568 per year).  Computer professionals are also covered under this rule, although they may still be paid hourly at a minimum rate of $27.63 per hour.  (This rate hasn’t changed under the new legislation.)Other rules governing the status of “exempt” employees didn’t change, including the “duties test” –a salaried administrative professional must:·         Regularly supervise a minimum of two employees·         Have management as the primary duty of the position·         Have input into the job status of other employees (such as hiring, firing, or promotions, etc.)If employees don’t meet these criteria and their salary is less than $684 weekly, they must be paid hourly and receive overtime pay for any time worked in excess of 40 hours per week.Employers will have the option to use non-discretionary bonuses, incentive payments, and commissions to satisfy up to 10% of the minimum salary requirements.  If, at the end of the year, the employee’s salary plus any other payments (bonuses, commissions, etc.) is less than $35,568, the employer will have one pay period to make up the shortfall.In the event that state and federal rules differ, follow the more stringent of the two, or consult an attorney about how to classify your employees.If you need accounting or business guidance from a CPA, trust the team at Patrick & Raines CPAs.  Let us know if we can help:  Office@CPAsite.com or 904-396-5400.