New Overtime Rules Take Effect January 1, Add to Slate of New Employment Laws

By Gary Savine, Savine Employment Law, Ltd. and  Judy Mason, CPA, CVA - Partner, MichaelSilver 
November 2019

The US Department of Labor (DOL) has published its final overtime rule. The final rule will become effective on January 1, 2020. The new rule affects workers who serve in white-collar exempt roles (e.g. executive, administrative and professional roles). It does not change other exemptions that typically apply to commission-based salespeople.

Specifically, the new rule increases the salary levels for white-collar and highly compensated employee exemptions from overtime pay. The new salary level for white-collar exemptions will be $684 per week ($35,568 annually), up from $455 per week ($23,660 annually). The new salary level for highly compensated employees will be $107,432, up from $100,000. The rule also permits employees to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the required salary level.

This new rule adds to a list of new employment laws taking effect in 2019 and 2020. At a minimum, employers should check their white-collar exempt workers’ salaries to determine if they will remain above the salary threshold necessary to maintain exempt status and plan for any necessary adjustments to take effect by January 1, 2019. Employers should also plan for other laws, including:

  1. Amendments to the Illinois Equal Pay Act that bans pay history inquiries and prohibits employers from preventing workers from discussing their pay with coworkers.

  2. Amendments to the Illinois Right to Privacy in the Workplace Act that change discrimination and drug testing laws to account for the decriminalization of recreational marijuana use.

  3. Amendments to the Illinois Human Rights Act that require employers to provide annual sexual harassment prevention training.

  4. Chicago’s “Fair Workweek Ordinance” that requires employers to publish work schedules in advance or pay premium wages as a penalty.

For more information or assistance on how to plan for any necessary adjustments prior to January 1st, we encourage you to contact Gary Savine at 312.800.1439 or Judy Mason at 847.982.0333. We would be happy to discuss these new rules and laws and other planning strategies with you.

Gary Noah Savine is an employment lawyer and the founder of Chicago-based law firm Savine Employment Law, Ltd. Gary brings to the table over twenty years of legal expertise and hands-on experience, working around the globe, shoulder-to-shoulder with senior executives and human resource professionals solving the thorniest of workplace disputes. Before starting his firm, Gary practiced employment law exclusively at two of Chicago’s largest law firms and served as chief employment counsel at Navistar (NYSE: NAV) and Hill-Rom Holdings (NYSE: HRC). Gary frequently speaks and writes about employment law issues. He has written and presented before the American Bar Association, the National Employment Lawyers Association, the Northern Illinois Society for Human Resources Management, the Northern Illinois Franchise Association and the American Conference Institute. Gary received his law degree cum laude from the University of Michigan Law School in 1996. More information about Gary’s firm can be found at www.savinelaw.com.

Judy Mason, CPA, CVA – Partner, MichaelSilver has over 20 years of tax, accounting, business consulting, and compliance experience, serving closely-held and start-up businesses, entrepreneurial and family-owned companies, their owners and families. Her expertise is in federal, state and local taxation. Judy has a broad depth of expertise in state and local tax research, planning, and compliance matters for entities and individuals with multi-state businesses and/or investments. She has successfully managed a broad range of federal income, and state sales and use tax audits for entities and individuals. As a Certified Valuation Analyst (CVA), Judy prepares business valuations used for various purposes such as estate and gift planning, business succession, buy/sell agreements and litigation support.