Effective January 1, 2020, the salary threshold for exempt employees to receive overtime pay will increase from $455 per week, or $23,660 annually, to $684 per week, or $35,568 annually, according to a long-awaited Department of Labor (DOL) final rule. To qualify for overtime exemption in the United States, an employee must receive a fixed salary independent of the hours they work, the employee’s salary must meet or exceed the salary threshold and the employee’s responsibilities must involve executive, administrative or professional duties. The final rule did not alter the duties test for executive, administrative or professional employees, thereby ensuring consistency for employers when determining overtime pay allocation.
The National Apartment Association (NAA) and National Multifamily Housing Council (NMHC) issued a comment letter to DOL in March advocating for smart, fair overtime pay reform. The apartment industry strongly opposed DOL’s 2016 final, and later overturned, rule that raised the salary threshold to $913 per week or $47,476 annually. Many NAA/NMHC recommendations are reflected in the new final rule including the omission of automatic adjustments to the salary threshold, instead opting to update the threshold more regularly through notice-and-comment rulemaking. The final rule will allow employers to count non-discretionary bonuses towards satisfying up to 10 percent of an employee’s salary threshold.
NAA commends the efforts of the DOL for establishing an overtime rule that balances the need for fair compensation to our nation’s hardworking employees with the realities of achieving economic growth. The passage of the final rule marks a victory for the apartment industry and the 17.5 million American jobs it supports.
For further information on labor issues, please contact Sam Gilboard, NAA’s Manager of Public Policy.