OVERTIME – NEW FEDERAL “SALARY” TEST FOR EXEMPT EMPLOYEES

An employer does not have to pay overtime to an “exempt” employee. To be an exempt employee, employee must satisfy a “salary” test AND a “duties” test.

As of January 1, 2020, the “salary” test INCREASED under federal law from at least $455/week to $684/ week (equivalent to $35,568 per year for a full-year worker).

CAUTION: Many employers believe that simply paying an employee a salary makes the employee exempt from overtime. WRONG. An exempt employee must not only be paid a minimum salary of at least $684/week, BUT ALSO perform “duties” of an exempt employee.

Please do not hesitate to contact Gordon L. Osaka, Attorney at Law, P.C. if you need help complying with this new law.