We would need to lower that hourly rate to an amount that, with 5 hours of overtime each week, would equal the current wage of $585 per week. These solutions are allowed according to the code of federal regulations. $585 = 40x +5 (1.5x) New York City Employers (11 or more employees) / Executive and Administrative Exemptions. This number was based on the 20 th percentile of weekly earnings for full-time salaried workers in the lowest income census region (currently the South). Top Ten Tips Disclaimer. Using our $500 example, the regular rate for a 42 hour week is $11.90, but the regular rate for a 49 hour week is $10.20. Read on for everything you need to know about the new ruling! There are options for reducing the impact of the new overtime rule. Aside from the legalities, there is the consideration of the “psychological contract” between employee and employer. As with any business decision, all factors should be considered before making a final determination. No changes to the duties test have been made. $35,356 annually $684 weekly. More narrowly, the minimum salary level varies by business size. The Final Rule goes into effect on January 1, 2020. This is only one of the factors used in determining whether a worker is exempt from overtime under federal or state law. To use this method we need a bit of algebra. Minimum Salary Threshold. Georgia's state minimum wage rate is $7.25 per hour.This is the same as the current Federal Minimum Wage rate. That is up from $13.50 an hour in 2020. Franczek P.C. The New York State minimum wage rates and minimum overtime-exempt salary levels for employees working outside of New York City will increase on December 31, 2020. For 2021, the Washington minimum wage will be $13.69 per hour (an increase from the current $13.50 per hour). Minimum Threshold 2020. According to the new exempt employee law that went into effect January 1, 2020, all executive, administrative, professional, computer, and outside sales exemptions require that the employee … The current salary threshold is $3,466.67 a … Conduct an audit. This method works best with standard workweeks. That is up from $13.50 an hour in 2020. These numbers are calculated by doubling the applicable minimum wage, multiplying that … Bill is a partner at Franczek P.C. Large businesses (51 or more employees): An exempt employee must earn a salary of at least 1.75 times the minimum wage, or $958.30 a week ($49,831.60/year). A federal district court in Texas agreed and blocked the rules from taking effect. That amount plus the regular salary of $500 would amount to $527.78. *Note: The Department of Labor revised the regulations located at 29 C.F.R. This means that the minimum salary for exempt employees in 2020 is either: $4,160.00 per month (or $49,920.00 annually) if the employee works for an employer of 25 or fewer people, or. $585 = 47.5x The wage and hour team at Franczek PC created this blog to provide timely, practical insights on wage and hour law to employers. One solution is to re-structure the formerly exempt employee’s pay so that the new pay with overtime approximates what he was making previously without the overtime pay. This latest increase will move California one step closer to its goal of a $15 per hour minimum wage. Employees that are classified as exempt are automatically excluded from minimum wage and overtime requirements that the FSLA provides, as well as any state … Salary Threshold for Exempt Employees (2020) The tiered salary thresholds across the state are also rising in-line with the minimum wage. Effective January 1, 2020, the federal government is raising the minimum salary requirement for exempt positions from $455 to $684. The current minimum salary was $455 per week, or $23,660 annually. Effective January 1, 2020, however, the minimum salary level to be exempt will increase to $684 per week ($35,568 per year). For 2020, exempt employees must be paid $684 per week ($35,568 annually), consistent with federal law. October 3, 2021. Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). The minimum wage applies to most employees in Georgia, with limited exceptions including tipped employees, some student workers, and other exempt occupations.. This rule took effect on January 1, 2020. The Georgia minimum wage was last changed in 2008, when it was raised $0.70 from $6.55 to $7.25. The New York State minimum wage rates and minimum overtime-exempt salary levels for employees working outside of New York City will increase on December 31, 2020. This arrangement works well with fluctuating work week hours. The key, of course, is to make the salary arrangement in writing, in advance, with the employee. Note, however, that under Maine law, the minimum salary level for exempt employees must exceed 3000 times the applicable state minimum wage—or the rate established by the U.S. DOL, whichever is higher. X= $12.315. Then, any hours worked over 40 would require a payment of “half-time”, since the all the straight time would have already been paid. The new final rule will take effect on January 1, 2020. The new minimum salary is now $684 per week, or $35,568 annually. Committing to updating the salary threshold more regularly. On Tuesday, the U.S. Department of Labor issued its final rule concerning overtime exemptions. In 2021, exempt employees at smaller employers must be paid $827 per week ($43,004 annually) and $965 per week ($50,180 annually) at larger employers, consistent with the new MWA rules. A second option is to calculate an hourly rate that will be equal to what the employee made previously as an exempt employee, but now including the overtime. So, the regular rate may fluctuate from week to week. That translates to thousands of extra payroll dollars ($11,908 annually) for companies like retail, dry cleaners, restaurants, cleaning companies and lots of other businesses with traditionally lower wages. On December 31, 2019, the state minimum weekly salary for administrative and executive employees will range from $885.00 per week for employees outside of New York City and Nassau, Suffolk and Westchester counties, to $1,125.00 per week for employees who work in New York City for large employers and Fast Food Establishments. The new rule is set to take effect on January 1, 2020 and increase the number of overtime-eligible employees by 1.3 million. Job titles do not determine exempt status. Need Help? The regular rate must be calculated weekly, using all earnings for the week divided by all hours worked that week. Legal challenges to the new rules are highly likely to follow. Note, however, that under Maine law, the minimum salary level for exempt employees must exceed 3000 times the applicable state minimum wage—or the rate established by the U.S. DOL, whichever is higher. If the criteria of the New York State exception match those in the FLSA, this Department usually applies the criteria consistently with the FLSA, its regulations, and interpretations issued by the U.S. Department of Labor. 5 hours times $ 18.48 = $ 92.40 ($12.315 x 1.5) As an example, if an employee makes a current salary of $585 per week and regularly works 45 hours per week, then he has a regular rate of $13 per hour. The minimum salary requirement for 2020 for white-collar workers is $54,080 for employers with 25 or fewer employees and $49,920 for employers with 26 or more employees. They are as follows: In 2014, Bill was named to the annual “40 Under 40” published by Law Bulletin Publishing which recognizes 40 attorneys under the age of 40 based on nominations by their clients, peers and the legal community. Here are the highlights: 1. The new thresholds will go into effect on Jan. 1, 2021. The annual minimum compensation for “highly compensated employees” (HCEs) also increases. 10/6/2020. $4,506.67 per month (or $54,080.00 annually) if the employee works for an employer of more than 25 people.⁠40. Federal / Executive, Administrative, and Professional Exemptions. For employers with 25 or fewer employees, the minimum annual salary would be $49,920. In order for an … The salary test. Exempt Executive, Administrative, Professional and Computer Employees (EAP) Under this rule, employers must pay salaried exempt EAP employees at least $684 per week on a salary basis. These new minimums will take effect on January 1, 2020. $23,660 annually $455 weekly. We will keep you updated on any new developments as the effective date of the new rule approaches. The 2016 rule also increased the minimum salary for HCEs (to $134,004), allowed employers to use nondiscretionary bonuses and incentive pay to satisfy up to 10% of the salary threshold, and provided for automatic annual updates to keep the minimum salary level adjusted to the 40th percentile of full-time salaried workers in the lowest-wage Census region. The FLSA 's minimum salary threshold and the Illinois Educational Labor Relations Board, 2021 on Tuesday, the threshold! Overtime-Eligible employees state minimum salary for exempt employees 2020 1.3 million is $ 35,568.00, or $ 684.00 per week worked that week works an... 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