New Year, New You, New Rules!

Welcome to 2020 – a new decade! As we recover from the holidays and settle into our first full week of the new year, it’s important to remember that things have changed (sort of). To help keep you informed, we’ve summarized a few key changes below:

  • New overtime rule raises salary threshold for exempt employees
  • Regulations on regular rate of pay affect overtime calculations
  • Minimum wage increases in several states
  • New posters published
  • Updated Federal Contract Compliance Manual from the Office of Federal Contract Compliance Programs (“OFCCP”)
  • New Form W-4 published by the IRS

The Fair Labor Standards Act (“FLSA”) overtime rule determines whether employees are eligible or exempt for overtime pay. On September 24, 2019, the Department of Labor issued a final rule increasing the salary threshold for white-collar exemptions. Workers who do not earn at least $36,568 a year ($684 a week) or who do not pass the “duties” test must be paid overtime. The final rule went into effect on January 1, 2020. If you have not analyzed whether your employees pass both the salary and duties test, you should do that ASAP! See more on the final rule and exempt employees on our blog.

“Regular Rate” of Pay and Overtime Calculations: Under the FLSA “regular rate” is a legal term of art. The calculation includes all remuneration paid to the employee minus payments falling into specific statutory exceptions divided by the hours worked during the workweek in question. The recent updates address whether certain forms of compensation can be excluded for an employee’s regular rate of pay.

Ohio increased its minimum wage to $8.70. There were no changes at the federal level or in Kentucky or Indiana. Minimum wage increases also come with updates to workplace posters. Employers in Ohio should update their Ohio workplace posters.

The OFCCP’s Federal Contract Compliance Manual provides guidance for the agency’s compliance officers in conducting compliance evaluations, compliant investigations and providing federal contractors with compliance assistance. If your company is a federal contractor, it is important to be up-to-date on these rules.

Don’t worry! While things have changed, much remains the same. We anticipate more from the employment agencies in 2020. As they say, the only constant in life is change. Cheers to the new decade!

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