New Overtime Pay Ruling: What You Need to Know

The U.S. Department of Labor’s recent decision on overtime pay extends to 1.3 million U.S. workers. Previously workers were automatically entitled to overtime pay only if they earned $23,660 or less a year, says Employco USA president and compensation expert Rob Wilson.


But, starting on Jan. 1, 2020, that salary ceiling will be raised to $684 per week or $35,568 per year. However, if a state has a higher threshold, this ruling does not apply. The federal law is the minimum and states are free to have higher thresholds for overtime pay. Therefore, it’s important to know the laws in your particular state.

And it is not just workers who earn under the $35,568 threshold who will be eligible for overtime. “If a worker earns more than $35,568, but their duties are not managerial, they may still be eligible for overtime,” says Wilson. “That is why it is so important for employers to become educated about the regulations in their specific industry and in their state. A employment solutions firm like Employco can be invaluable in helping employers to demystify these evolving overtime requirements.”

As points out, workers most likely to be affected are retail and restaurant managers. Part-time employees are also likely to be affected as there is no exemption for part-time workers.

Visit the Department of Labor’s website for more information on overtime pay regulations.