Watch the Clock: Federal Overtime Rules Changing

In our ever-connected workplaces, many employees work more than their “regular” schedule. Recently, the federal government announced an update to its rules surrounding overtime. While primarily governed by the Fair Labor Standards Act (FLSA), the Department of Labor has many modifying rules that set out how employers/employees apply the FLSA

Under the update, employees that make more than $35,568 will be eligible for overtime, effective January 1, 2020. Previously, the “threshold” was $23,660. Whether an employee is “exempt” or not eligible for overtime is based on a variety of factors in addition to the threshold. As such, employers should plan on updating their policies and reviewing their application of the law given the new announcement.

It should be noted that certain states (i.e. New York and Pennsylvania) set the threshold higher than the federal government. In those states, employers must pay overtime consistent with state law and cannot opt for the “lower” federal government standard. The list of states increasing the federal threshold is constantly growing – all the more reason for employers to continue to watch their policies and compliance efforts.