--- title: DOL Releases Final Overtime Rule, Effective Jan. 1, 2020 description: The Department of Labor has announced the new minimum salary for certain exempt white collar employees. The new minimums will take effect January 1, 2020. image: https://www.tbsmga.com/hubfs/american-flag-2174720.jpg --- [![ScalePEO Logo](https://www.tbsmga.com/hubfs/Logos/ScalePEO%20Logo.svg "ScalePEO Logo")](http://www.scalehro.com) [![ScalePEO Logo_White](https://www.tbsmga.com/hubfs/Logos/ScalePEO%20Logo_White.svg "ScalePEO Logo_White")](http://www.scalehro.com) [![Call  Now](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/4567611/0f163431-55bb-4494-afb0-6c004b4bddaf.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/4567611/0f163431-55bb-4494-afb0-6c004b4bddaf) [![Login](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/4567611/40813805-41b0-4c9e-bf04-42d6a3049980.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/4567611/40813805-41b0-4c9e-bf04-42d6a3049980) [BUY WITH PACK](https://marketplace.hubspot.com/products/palmspire/growth-series-pack) [BUY THIS PAGE](https://marketplace.hubspot.com/products/palmspire/growth-series-version-2) - [hr](https://www.tbsmga.com/blog/topic/hr) - [Compliance](https://www.tbsmga.com/blog/topic/compliance) - [Employment Law](https://www.tbsmga.com/blog/topic/employment-law) | 1 min read # DOL Releases Final Overtime Rule, Effective Jan. 1, 2020 [Read More →](https://www.tbsmga.com/blog/dol-releases-final-overtime-rule) By [ScalePEO HR Pros](https://www.tbsmga.com/blog/author/scalepeo-hr-pros) - [Tweet](https://twitter.com/share) The Department of Labor has announced the new minimum salary for certain exempt white collar employees. The new minimums will take effect January 1, 2020. **Exempt Executive, Administrative, Professional and Computer Employees (EAP)** Salaried exempt EAP employees must be paid at least $684 per week on a salary basis (an increase from the current minimum of $455 per week). This is the equivalent of $35,568 per year. Up to 10% of this minimum may come from non-discretionary bonuses, incentive payments, and commissions (collectively, “incentive pay”), so long as these payments are received on at least an annual basis. If an employee does not earn enough incentive pay to meet the minimum by the end of the year, the employer has two options: pay the difference with a “catch-up” payment within one pay period after the end of the 52-week year or retroactively remove the exemption and pay the employee for any overtime worked during that same year. Teachers, practicing lawyers, practicing doctors, and outside salespeople are exempt from these minimums under federal law, though may be subject to state minimums. **Exempt Highly Compensated Employees (HCE)** The HCE exemption is intended for employees who don’t quite qualify for the EAP exemptions due to their job duties, but who happen to be paid extremely well. This exemption is used much less commonly than the others and most exempt employees will fall under the EAP exemptions. Employees classified as exempt under the HCE exemption must make at least $107,432 per year. Of that amount, at least $684 per week must be paid on a salary or fee basis, with no reduction for future incentive pay. The remainder of their income, however—nearly 67% if they make $107,432—may come from incentive pay. If the employee does not earn enough in incentive pay to meet the minimum by the end of the year, the employer has the same two options as with EAP employees. They can make a catch-up payment (in this case within one month) or retroactively remove the exemption and pay the employee for any overtime worked during the previous year.   **State Law** California, New York, and soon Washington have laws in place that make the minimum salary for exempt employees higher than the new federal thresholds. Since employers must follow the law that is most beneficial to employees, the new federal minimums would not affect employers in these states.   **What Now?** Employers will need to evaluate anyone who they currently classify as exempt from overtime and pay less than $684 per week or $35,568 per year. Once these employees are identified, employers will need to choose between giving them a raise to meet the new minimum to maintain the exemption or reclassifying them as a non-exempt and paying overtime.   *Legal Disclaimer: This should not be construed as legal advice. If you have legal questions concerning your situation or the information you have obtained, you should consult with a licensed attorney.* [All Posts](https://www.tbsmga.com/blog/all) ![ScalePEO HR Pros](https://www.tbsmga.com/hubfs/Images/Team/scalepeo-employee-placeholder.jpg) ###### ScalePEO HR Pros ## Related Posts ## [How to Avoid Interview Bias with the Help of a PEO](https://www.tbsmga.com/blog/avoid-interview-bias) In today's dynamic and diverse workplace landscape, fostering a just hiring process is crucial for buildi... [Continue Reading](https://www.tbsmga.com/blog/avoid-interview-bias) ## [What's New in 2024- Employment Laws & Rules](https://www.tbsmga.com/blog/2024_employment_laws_rules_state_by_state) Now that 2024 is officially in full swing, we want to help ensure you are set up for success and aware of... [Continue Reading](https://www.tbsmga.com/blog/2024_employment_laws_rules_state_by_state) ## [How to Save Your Company During a Recession in 2022](https://www.tbsmga.com/blog/save-your-business-during-recession) Wondering how to save your company during a recession? You're not alone. A recession spells doom and gloo... [Continue Reading](https://www.tbsmga.com/blog/save-your-business-during-recession) ## Leave a reply ** [![Human Resources Today](https://widget.aggregage.com/images/humanresourcestoday/badge-clear.gif "Human Resources Today")](https://www.humanresourcestoday.com/%26source=scalehro) ## Subscribe and Get The Latest News [![ScalePEO Logo](https://www.tbsmga.com/hubfs/Logos/ScalePEO%20Logo.svg "ScalePEO Logo")](http://www.scalehro.com) We take on the burden of HR and administrative tasks allowing you to focus on increasing productivity and growth.   Doing business in California as SPG Insurance Solutions License No. 0L09546 ##### Features ##### Resources ##### About © Copyright 2024 [**](https://www.facebook.com/ScalePEO/) [**](https://www.linkedin.com/company/scalepeo) [**](https://twitter.com/Scale_PEO) ![](https://dc.ads.linkedin.com/collect/?pid=1090220&fmt=gif) ![](https://ws.zoominfo.com/pixel/613a50dd73005a001a5a4020)