With Eugene Scalia serving as the acting U.S. Secretary of Labor, the Department of Labor (DOL) is finalizing multiple changes that have been in the works since 2017.
The biggest change, effective Jan. 1, is the increase of the exempt salary threshold from $455 per week to $684 per week.
The most recent change, published on Dec. 16, 2019, is new rules for calculating an employee's regular rate of pay for the purposes of calculating overtime, which is effective Jan. 15.
This most recent change, the first of its kind in over 50 years, addresses what perks must be included and those that can be excluded when calculating the hourly rate to be paid at time-and-a-half to non-exempt employees who work overtime.
The change is designed to make it easier for employers to offer non-exempt employees perks and benefits without having to count their value toward overtime. Excluded perks include:
- Cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on goods and services, certain tuition benefits and adoption assistance.
- Payments for unused paid leave, including paid sick leave or paid time off.
- Reimbursed expenses including cell phone plans, credentialing exam fees, organization membership dues and travel, even if not incurred solely for the employer's benefit.
- Certain sign-on, longevity and discretionary bonuses.
- Contributions to benefit plans for accident, unemployment or legal services.
If you offer these types of benefits, you should review the changes carefully to be sure you are calculating overtime properly.
Other DOL changes expected in 2020 include changes to rules about tip pools and how joint employers are defined.
Jan. 1 also brings minimum hourly wage increases to several states, including (note this list does not include city and county increases):
- Alaska: $10.19
- Arizona: $12.00; $9.00 tipped
- Arkansas: $10.00; $2.63 tipped
- California: $12.00 small employers; $13.00 large employers
- Colorado: $12.00; $8.98 tipped
- Florida: $8.56; $5.54 tipped
- Illinois: $9.25; $5.55 tipped
- Maine: $12.00; $6.00 tipped
- Maryland: $11.00
- Massachusetts: $12.75; $4.95 tipped
- Michigan: $9.65; $3.67 tipped
- Minnesota: $10.00 large employers; $8.15 small employers
- Missouri: $9.45; $4.73 tipped
- Montana: $8.65
- New Jersey: $11 most employers; $10.30 seasonal, small and/or agricultural employers; $3.13 tipped
- New Mexico: $9.00; $2.35 tipped
- New York: $11.80
- Ohio: $8.70 large employers; $7.25 small employers; $4.35 tipped
- South Dakota: $9.30; $4.65 tipped
- Vermont: $10.96; $5.48 tipped
- Washington: $13.50
Affinity HR Group is here to help you navigate the changes to federal, state and local wage-and-hour laws. To learn more, visit Affinity HR Group online, a Big "I" Hires partner.