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Overtime Rule Raises Annual Threshold to $35,568

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The U.S. Department of Labor (DOL) issued a final rule this week that will raise the overtime salary limit from $455 per week to $684 per week – the equivalent of $35,568 per year for full-time workers. This rule will go into effect January 1, 2020.

Any professional, administrative, and executive level employees earning less than $35,568 per year would be due time and a half if they work more than 40 hours per week. According to DOL, this would impact 1.3 million American workers.

The final overtime rule is a win for ACCA members and our advocacy efforts. ACCA opposed the 2016 Obama-era rule that would have raised the threshold to $47,476 per year, which could have been a hardship for many ACCA members. The overtime rule had not been updated since 2004, and ACCA supported increasing the overtime rule to be in line with inflation. The final rule reflects an inflation adjusted update.

ACCA took our message to the highest levels of the federal government to oppose the $47,476 proposal and advocate for a more business-friendly update. We hosted former Secretary of Labor Alex Acosta at ACCA’s annual convention and met with hundreds of Senators and Representatives to share your stories. ACCA also submitted public comments highlighting the impacts of this rule on the contracting industry.

The final rule also does not include automatic updates for future overtime threshold increases. ACCA supports formal rule making processes that will allow ACCA members to submit comments on how future rulemakings will impact their business.

The final rule also:

  • Leaves untouched the standard duties tests for determining whether a worker would be subject to overtime;
  • Raises the total annual compensation level for “highly compensated employees” from the currently enforced level of $100,000 to $107,432 per year;
  • Allows employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices; and
  • Revises the special salary levels for workers in U.S. territories and in the motion picture industry.

You can read ACCA’s public comments here.

Read some of the politics behind the rule here.

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