On September 24, 2019, the U.S. Department of Labor announced a final rule expected to impact 1.3 million American workers.

In the final rule, the Department is:

  • Raising the “minimum salary level” from the currently enforced level of $455 per week to $684 per week for the executive, administrative and professional exemptions (equivalent to $35,568 per year for a full-year worker);
  • increasing the total annual compensation requirement for the highly compensated employee exemption from the currently enforced level of $100,000 per year to $107,432 per year;
  • allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the minimum salary level, in recognition of evolving pay practices; and
  • revising the special salary levels for workers in U.S. territories and the motion picture industry.

The final rule will be effective on January 1, 2020.

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