The U.S. Department of Labor increased the minimum salary threshold from $23,660 a year to $35,568, making approximately 1.3 million workers eligible for overtime pay. The increase will take effect on January 1, 2020.
The following are the details of the final rule:
- Increase in the “standard salary level” from $455 to $684 per week (or $35,568 annually for a full-time employee)
- For highly compensated employees (HCE), an increase in the total annual compensation level from $100,000 to $107,432 annually
- Permit employers to use annual incentive payments (such as commissions) and nondiscretionary bonuses to make up 10 percent of the standard salary level
- Alter the special salaries employees in the film industry make in the U.S.
While employers are satisfied with the new threshold, critics argue the raise isn’t enough.
The minimum salary threshold was previously set in 2004. Today, a salary of $23,660 falls below the poverty line for a family of four.
The Obama administration addressed the issue by proposing an increase of up to $47,000. However, a Texas judge decided against the proposal. On the other hand, the Trump administration set the salary requirement at a lower level compared to the previous administration's proposal.
Yet, more and more states are inquiring about setting their overtime rules above the new federal threshold. For example, California and New York have enacted new overtime laws that raise their salary thresholds to approximately $50,000. Colorado, Pennsylvania, Washington, and other states are looking into similar proposals.
Are you being unlawfully paid under the minimum salary threshold? Are you worried your employer won’t adjust your wages when the new rule comes into effect in 2020? If you answered "yes" to any of these questions, let our legal team at Shellist Lazarz Slobin LLP review your case and determine your available legal options.
For more information about the federal and Texas overtime laws, contact Shellist Lazarz Slobin LLP today at (713) 352-3433.