Q: Our Human Resources department reminded us that the new overtime rule just took effect on January 1, 2020. What exactly did it do?
A: The new overtime rule increases the minimum salary threshold for employees to be classified as “exempt” from $23,660 per year ($455 per week) to $35,568 per year ($684 per week).
The effect of increasing the minimum salary threshold is that it changes the employment status of many exempt employees to nonexempt, which effectively makes them eligible for overtime and require the tracking of hours worked.
Recall that the increase in the salary threshold is only one criteria of the test to determine whether an employee is classified as exempt. An employee must also meet one of the duties tests to be an exempt employee. The duties classifications under the Fair Labor Standards Act (“FLSA”) are: executive, administrative, professional, or computer professional. Generally, this means that the rule change may affect nurses, administrators, speech-language pathologists, and other non-teaching professionals who fail to meet the new $35,568 threshold.
Note that teacher pay is unaffected by this new rule. Thus, even if a teacher’s salary is below $35,568, the teacher does not hold nonexempt status and is not eligible for overtime.
From a practical perspective, many employees who were previously exempt will not be accustomed to tracking their time nor asking whether they are permitted to work additional hours. As the new year begins and the new rules are implemented, it is important that employers identify the employees who are affected, watch their hours closely and coach them into good time-keeping practices. A failure to do so could result in large amounts of overtime pay, and could seriously impact the district’s finances if the failure is widespread.
For more information on the new overtime rules, the Department of Labor has released guidance and Frequently Asked Questions, which can be found on their website at https://www.dol.gov/agencies/whd/overtime/2019/overtime_FAQ. For specific questions concerning the application of the new rules to your district, contact your school attorney.