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On September 27, the Department of Labor published a final rule to rescind the Obama Administration’s overtime rule and finalize new federal overtime regulations. Specifically, the final rule:

  • Updates the salary threshold that triggers the overtime exemption from the current level of $455 per week (approximately $23,660 per year) to $684 per week ($35,568 per year);
  • Permits nondiscretionary bonuses and incentive payments (including commissions), which are paid yearly or more frequently, to count towards up to 10 percent of an employee’s salary for purposes of the exemption; and
  • Commits to more “regular” updates of the salary level through a formal notice-and-comment rulemaking.

The final rule will go into effect on January 1, 2020. A memorandum describing the major features of the final rule can be found here.