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In late September 2019, the Department of Labor issued its final rule to allow more employees to collect overtime by raising the qualifying salary from $455 per week ($23,660 annually) to $684 per week ($35,568). Final Rule Notice. Under the Fair Labor Standards Act, employers must pay their non-exempt employees overtime pay for hours worked over forty hours in a week at a rate not less than time and one-half of their regular wage. Employers who don’t take the time to review their payroll, and ensure that all eligible employees are classified for overtime, risk substantial penalties. An employer’s failure to pay overtime to an qualified employee risks having action taken by either the employee, or the Department of Labor.

Even if businesses are currently compliant, they may not be starting next year. The new rule goes into effect on January 1, 2020, and employers will likely have more employees on payroll entitled to overtime. The Department of Labor estimates that approximately 1.2 million employees will benefit from the increased salary threshold. Businesses should start auditing their payroll now to make sure they are compliant when the new rule goes into effect. The employment attorneys at Nemirow Perez P.C. can help your business with a payroll audit. Contact Kevin Perez or Christopher P. Brown for additional information.