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U.S. Department of Labor Issues Final Overtime Rule

On September 24, 2019 the U.S Department of Labor announced a final rule to make 1.3 million U.S. workers eligible for overtime pay under the Fair Labor Standards Act (FLSA).

This rule revises the earnings limits necessary to exclude executive, administrative, or professionals from the FLSA’s minimum wage and overtime pay requirements and allow employers to add a percentage to specific bonuses toward meeting the salary level. The new limits account for growth in employee earnings since the currently enforced limits were set in 2004. The changes to take place by the department are the following:

Raising standard salary level from $455 to $684 per week.
Raising the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year.
Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices.
Revising the special salary levels for workers in U.S. territories and in the motion picture industry.

The final rule is effective on January 1, 2020.

For more information on this rule visit the following link: here

New California Employee Classification Test Signed into Law

On September 18, 2019 California Governor Gavin Newsom signed a legislation placing in law the test for determining when an employee is an independent contract.

The legislation, Assembly Bill 5 (AB5) , codifies a 2018 California Supreme Court decision and carves out exemptions for some professions, including doctors and real estate agents. The new test expands which workers must receive such benefits as minimum wage and paid sick leave.

Many believe AB5 will have a huge impact on gig jobs, as the legislation jeopardizes the flexibility and income opportunities the modern employment model provides for thousands of California workers.

Click here to learn more on AB5 and get information on who it will impact.

The law is effective January 1, 2020.