FLSA Rule Updates Halted

On November 23, a federal judge issued an injunction to halt the updated rules of the Fair Labor Standards Act (FLSA) from going into effect on December 1. The current FLSA rule, which include a salary threshold of $23,660, remains in effect until a final decision is reached.

The updated rules would expand overtime benefits to salaried employees who earn up to $47,476 annually and whose job responsibilities are not primarily considered administrative, professional, or executive. The updated rule is expected to impact 4.2 million workers, per the U.S. Department of Labor.

The updated rule includes:

·       A salary threshold increase from $23,660 to $47,476 a year or from $455 to $913 a week. Under the rule, salaried employees still need to pass the duties test, but not until their annual salary reaches $47,476. 

·       A salary threshold update every three years. According to DOL’s projections of wage growth, the threshold amount will be approximately $51,000 at the time of the first adjustment in 2020.

 ·       A “highly compensated employee” threshold increase from $100,000 to $134,000. At this salary level, only a “minimal showing” is needed to demonstrate if an employee is not eligible for overtime. 

·       Bonuses and incentive payments may count for up to 10 percent of the new salary thresholds.

ERA will continue to monitor and notify you of any updates.

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