Do You Pay Employees A Salary? Don't Make This Mistake!

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.