U.S. Department of Labor Increases Weekly Salary Threshold

Starting January 1, 2020, the minimum salary of “white collar” exemptions for the Fair Labor Standards Act will be increasing. The increase will move the current salary of $455/week to $684/week. This will bump the annual salary up from $23,660 per year to $35,568 per year, substantial increases from 2019 to 2020. What does this mean for qualified employees?

Summary of Changes

• Adjusting up the average salary will also adjust the industries' national average percentile. This new rule will set qualified members at the 20th percentile of full-time workers.
• On the other end of the spectrum at the 80th percentile, highly compensated employees currently at $100,000/year will increase to $107,432/year. 
• Employers will now be allowed to offer up to 10% of the base salary through incentive payments and bonuses. 
  • If the employee's salary does not hit the new standard salary at the end of 52 weeks, employers will have to meet it during the next payment cycle. This ensures all employees will make at minimum, the salary they deserve.
• US territories will have revised salaries. This includes the Northern Mariana Island, American Samoa, Guam, Puerto Rico, and the Virgin Islands. These adjustments will vary based on the location.

Contact Us With Questions

The U.S. Department of Labor will be updating these salaries at a more regular basis than in the past. Although your day-to-day routine will not change, as a qualified employee, your salary is certain to. Some of these changes may be confusing at first, but are meant to benefit all employees affected. Before the 2020 changes, for more information or with questions, feel free to give us a call at (800) 453-5809.