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Federal overtime salary threshold to rise to $35,568

Managerial and administrative workers who earn more than a certain amount are not generally entitled to overtime pay. Employers in New York City with 11 or more workers must pay overtime to all workers who earn less than $58,500 per year. This figure will also apply to employers with 10 or fewer workers in 2020. The overtime threshold is far less generous in other parts of the country where federal rules apply.

The federal overtime threshold was set at $23,660 in 2004. During the Obama administration, an effort was made to increase the threshold to about $47,000. The Department of Labor said that a large adjustment was needed to keep the threshold in line with increases in the cost of living since the 1970s. However, that initiative was challenged in the courts and struck down by a judge in Texas.

On Sept. 24, a rule was finalized that will raise the federal overtime threshold to $35,568 in 2020. While that figure is considerably lower than the one President Obama wanted and New York City employers must abide by, it will still extend the protections of the Fair Labor Standards Act to about 1.3 million American workers who are routinely asked to work more than 40 hours during a workweek but are not currently entitled to overtime pay.

City, state and federal labor laws are complex and can be difficult to understand for both employers and workers. The regulations vary depending on the employer's location, the size of the workforce and the type of work performed, and it is not unheard of for employers to be surprised when they learn that their compensation practices violate the law. Attorneys with experience in this area may attempt to settle wage and hour claims amicably whenever possible. When the results of these efforts are unacceptable, attorneys may take more direct action on behalf of workers who have been treated unfairly.

Source: The Society for Human Resource Management, New York Finalizes Salary Threshold Increases, Lisa Nagele-Piazza, Dec. 30, 2016

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