Philadelphia Business Lawyer Sarah E. Holmes
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Do You Pay Employees A Salary? Don't Make This Mistake!

12/11/2019

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Do you have employees? Then you need to know about some important wage and hour law changes coming in 2020 for employers.

Many employers mistakenly believe that if they pay employees a salary, they don't need to pay them overtime.  That is mistaken.

New federal rules are coming that make over one million employees newly eligible to receive overtime.  If an employee is eligible for overtime, an employer will have to pay time and half for all hours worked over 40 in a week.

The final rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA's minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses (and commissions) towards meeting the salary level.
In the final rule, the Department is:
  • raising the "standard salary level" from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
  • 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; and
  • revising the special salary levels for workers in U.S. territories and in the motion picture industry.
Source:  https://www.dol.gov/newsroom/releases/whd/whd20190924

It's important to note that if you are not pay salaried employees the minimum level, you'll need to pay overtime. 

For hourly workers, changes are coming on a state level. Beginning on July 1, 2020, the minimum wage in Pennsylvania will be $8.00 per hour. In January 2021, it will be $8.50, $9.00 by July 2021, and $9.50 on Jan 1, 2022. 

Evaluating wages is also a great time to take a look at all of your employment policies and procedures. Are you using the proper non competes, non solicitation and non disclosure agreements? 

Set up a call with our legal staff today to discuss how we can help with your labor law compliance. 
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    Sarah E. Holmes is a Philadelphia business attorney and strategist that helps start ups and established businesses looking to expand, protect their assets and increase their profits in an approachable, down-to-earth way.  When you're looking for a business lawyer in Philadelphia, the Main Line or New Jersey, we can help.

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This website and its content herein constitutes attorney advertising.  Any content on this website should be construed as informational, not legal advice.  No information on this website is intended to create an attorney-client relationship.  Only a signed fee agreement between Sarah E. Holmes and the client will establish an attorney-client relationship.  Use of any information on this site is provided "AS IS" with no warranty of any kind, either express or implied.  Always consult with a licensed attorney in your own state for legal advice.
Photo used under Creative Commons from AK Rockefeller
  • Home
  • Attorneys & Areas of Law
    • Business Entities >
      • Corporations
      • Limited Liability Company (LLC)
    • Business Immigration
    • Business Purchase or Sale
    • Raising Capital & Investor Agreements >
      • Promissory Notes and Debt Financing
      • Private Placement and Equity Financing
    • Business Contracts >
      • Consulting Agreement
      • Employment Contracts
      • Independent Contractor (1099) Agreements
      • Website Terms and Privacy Policies
    • Copyright & Trademark
    • Hiring Employees/NDA/Non Compete
    • Estate Planning & Wills
    • Commercial Real Estate >
      • Commercial Lease
    • The Right Start Program
  • About
    • Speaking and Events
    • Client Testimonials
    • Privacy Policy/Terms of Use
    • Contact
  • Business Success Tips
  • Flat Fee Packages
    • New Businesses
    • Existing Businesses
    • Dispute Resolution
    • Trademarks & Copyright
    • Estate Planning
  • COVID-19 HELP