Effective January 1, 2020, the minimum salary requirement for the administrative, professional, and executive overtime exemptions will increase from $455 per week to $684 per week (or from $23,660 per year to $35,568 per year).
If your exempt employees’ salaries fall below this new threshold, you will generally either have to:
- Raise their salaries to the new requirement; or
- Reclassify the affected employees as non-exempt and pay them overtime whenever they work more than 40 hours in a workweek.
It can be hard to keep up on these new law changes as a small business owner, but the fines from the IRS can be damaging to any business. We at ADP can help make sure you stay up to date on these new laws and keep you in compliance. If you have any questions on which employees this will effect or any questions on how to make or implement this change, please reach out.