On September 24, 2019, the U.S. Department of Labor (DOL) announced a final rule to make 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act (FLSA). This is the first change in the overtime regulations in 15 years.

The final rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements and allows employers to count a portion of certain bonuses (and commissions) towards meeting the salary level. The new thresholds account for growth in employee earnings since the former thresholds were set in 2004. In the final rule, DOL is:

This final rule will be effective on January 1, 2020.

These increases to the salary thresholds are long overdue in light of salary and wage growth since 2004. DOL estimates that 1.2 million additional workers will be entitled to minimum wage and overtime pay as a result of the increase to the standard salary level. The Department also estimates that an additional 101,800 workers will be entitled to overtime pay as of result of the increase to the HCE compensation level.