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New FLSA Overtime Rules for 2020 – What Employees Must Know

November 13, 2019 | Posted in: FLSA

What Employees Must Know About the New FLSA Overtime Rules for 2020

In September of 2019, the Department of Labor released highly anticipated changes to the Fair Labor Standards Act (FLSA) regulations surrounding overtime pay.  New FLSA overtime rules regarding which employees qualify to earn overtime pay take effect on Jan. 1, 2020. The rules, which were set under the federal Fair Labor Standards Act (FLSA), apply to all employers in Ohio, and they cover both salaried employees and employees who get paid by the hour.

FLSA and unpaid overtime attorneys at The Friedmann Firm tracked the writing of the new FLSA overtime rules closely.  Briefly, here is what employees must know.

How Have the Federal Overtime Rules Changed?

The new 2020 overtime pay rules update and increase the salary test for determining who can earn overtime at a rate of one and one-half their regular hourly rate after working more than 40 hours during a workweek. The most important changes to the salary test are summarized in the following table.

Old Overtime Rules vs. New Overtime Rules Taking Effect in 2020

Old Rules in Effect from, 2004 through 2019New Rules Taking Effect in 2020
Standard Employee$455 per week or $23,660 per year (as calculated to include up to 10 percent of nondiscretionary bonuses, incentives, and/or commissions)$684 per week or $35,568 per year
Highly Compensated Employee$100,000 per year$107,432 per year

This means that in order for an employer to classify an employee as exempt from overtime, they must earn at least $684.00 per week or $35,568.00 per year.  Employees that are exempt from overtime must fall into one of the following exemptions in order to not be paid overtime:

1) Administrative Exemption

2) Executive Exemption

3) Professional Exemption

More on these exemptions can be found here: https://www.dol.gov/whd/overtime/fs17a_overview.pdf

The DOL estimates that this will make 1.3 million workers eligible for overtime pay.

Most workers should be treated as standard employees when determining overtime eligibility. Highly compensated employees include people like IT staffers and network administrators who typically get paid by the hour at rates that can exceed $100 per hour.

Salary tests also exist for individuals who work in the movie industry and for public safety employees such as police and firefighters. You can contact an employment attorney to get answers to specific questions regarding these other types of employees.

What Didn’t Change?

The only thing that has changed is the amount of money an employee can earn before he or she loses eligibility for overtime pay.  The chart above illustrates those changes. This means

  • The basic overtime rate remains 1.5 times an employee’s regular hourly pay.
  • Tipped employees such as restaurant servers and bartenders remain eligible for overtime.
  • Employers cannot automatically declare salaried employees exempt from earning overtime pay.
  • Duties tests remain in place and unchanged for executives, administrative personnel, learned professionals, creative professionals, computer employees, and outside salespeople.
  • Duties tests apply to both salaried employees and employees who get paid by the hour.
  • An employee must pass both the applicable salary test and duties test to qualify for overtime pay from January 1, 2020 forward.
  • An employer cannot categorize an employee as an executive, administrator, etc. solely to make that person ineligible to earn overtime.
  • Employees can sue employers for unpaid overtime.
  • Employers who are found to violate federal overtime rule can be made to pay back wages with interest, punitive damages, and attorney fees for employees.

Many unpaid overtime cases involve misapplications of duties tests, meaning your employer may classify you as exempt when you are truly non-exempt and should be earning overtime pay.  An examination of your actual job duties, not your job title, will dictate whether you are eligible for overtime pay.

Ohio Wage Laws Will Stay the Same

New 2020 FLSA overtime pay rule does not change anything about Ohio’s laws regard the minimum wage, the prevailing wage, or employment contracts.

Attorneys at The Friedmann Firm offer free and confidential consultations on all aspects of federal and state employment law. To speak with a lawyer, call our Columbus offices at (614) 610-9755.