2020 – The Big Change

As always, at the end of each year it is important to take a look at what the upcoming year will hold with regards to changes to employment and labor law, particularly those that will directly affect your organization and your employees. In 2020, there are a number of state and federal changes that will be taking place that the many employers will be impacted by.

The biggest change that will hit employers in virtually any industry or location, and will apply regardless of the size of the organization, is the long-awaited update to the federal exempt salary threshold for exempt employees. After years of debate on the topic, the Department of Labor released their final ruling on September 24, 2019, announcing an increase to the salary-level thresholds for white-collar exemptions.

Here are some things you need to know about this change:

• Takes effect on January 1, 2020.
• The salary threshold for professional, administrative, and executive exempts will raise from $455 per week ($23,660 annually) to $684 per week ($35,568 annually).
• Also applies to those who fall under the “computer employee” exemption.
• The DOL has elected to permit employers to use incentive bonuses, commissions, and non-discretionary bonuses to satisfy up to 10% of the salary threshold for these exemptions.
• The threshold for highly compensated employees has been raised from $100,000 to $107,432 annually.
• The duties test has remained the same from the requirements in recent years.

Employers are strongly encouraged to review the FLSA classifications of their employees prior to the end of the year and should be prepared to make any necessary changes to job descriptions, exempt classifications, and salaries as needed to ensure compliance with the new ruling.

HRCentral will contact our affected clients and colleagues to assist with any changes necessary for a smooth transition, in addition to discussing changes related to any state-specific updates that will hit at the start of the new year (e.g., changes to family and medical leaves, independent contractor statuses, and minimum wage increases).

Contact HRCentral today if you have any questions regarding this new rule, or if you need any assistance updating your policies or procedures accordingly for compliance, by email at office@hrcentral.com or by phone at 800.574.3282.