DOL Issues New Salary Limits for Overtime Exemptions

OVERVIEW

On Sept. 24, 2019, the U.S. Department of Labor (DOL) announced a new final rule that updates the salary thresholds that some individuals must meet in order to qualify for a
minimum wage and overtime exemption under the federal Fair Labor Standards Act (FLSA). The final rule becomes effective on Jan. 1, 2020. The final rule affects the exemptions for executive, administrative and professional (EAP) employees, highly
compensated employees (HCEs), employees in the motion picture industry and individuals who work in various U.S. territories.

ACTION STEPS

The final rule’s Jan. 1, 2020 effective date leaves little time for employers to prepare for the changes. Employers should:

  • Determine which currently exempt employees have
    salaries below the new threshold; and
  • Decide whether to increase salaries for these
    individuals or reclassify them as non-exempt
    employees.

The 2019 Overtime Final Rule

As expected, this final rule includes updates to the standard salary level for the EAP and HCE exemptions and allows employers to count up to 10 percent of an employee’s nondiscretionary bonuses and incentive payments (including commissions) as part of the employee’s standard salary level. The rule also creates special standard salary levels for the exemption that applies to employees in the motion picture production industry and some U.S. territories. The table below shows the salary levels for the EAP and HCE exemptions that will apply on Jan. 1, 2020. The final rule’s salary levels are different from the 2016 rule and the 2019 proposed rule.

Nondiscretionary Bonuses

The final overtime rule will allow employers to use up to 10 percent of an employee’s bonuses to satisfy salary level requirements if:

  • The bonus, commission or other incentive pay is nondiscretionary; and
  • The employee receives this incentive pay at least annually (during any given year or 52-week period).

The final rule also contains a “catch-up” provision that enables employees to remain exempt when their nondiscretionary bonuses aren’t enough to meet the salary level required by an FLSA exemption. Under this new rule, employers must make a “catch-up payment” within one pay period at the end of the 52-week period before losing that employee’s exempt status. The DOL has warned that any catch-up payment “will
count only toward the prior year’s salary amount and not toward the salary amount in the year in which it is paid.”

Additional Updates

The final rule sets a special salary level of $380 per week for American Samoa, and sets a special salary level of $455 per week for employees in Puerto Rico, the U.S. Virgin Islands, Guam, and the Northern Mariana Islands. The rule also establishes a base rate threshold for employees in the motion picture producing industry of $1,043 per week. This new threshold can be prorated based on the number of days the employee has worked. The DOL intends to update the standard salary and HCEs total annual compensation levels more regularly in the future through notice-and-comment rulemaking.

DOL Issues New Salary Limits for Overtime Exemptions

NAPEO19 Annual Conference & Marketplace

September 16-18, 2019

The conference planning committee continually strives to improve the content of the conference and this year will be better than ever!

From an educational point of view, there will be three tracks:

  • PEO Operations: This is new for 2019. Thanks to NAPEO’s Conference Chair Norman Paul, we have designed a new and ongoing focus to help PEOs improve operationally with instructional guidance in the areas of payroll, workflows, and overall efficiency.
  • Compliance: This topic is not only important to PEO customers, but to the liability of PEOs. The landscape and requirements are ever-changing and NAPEO’s staff and committees are staying on top of this to make your lives easier and reduce liability. This track will keep you abreast of the latest changes in the law and how best to navigate them.
  • Growth: Now is a great time to be in the PEO industry. The industry is growing and the market is embracing PEOs and outsourcing HR functions. NAPEO has been hard at work creating tools for our members to increase awareness and drive home the value of PEOs. In addition, your industry colleagues will be sharing their best practices about what works for them to grow their PEO’s.

Look forward to seeing everyone there! Check out the below link for more details on this years Conference.

https://www.napeo.org/annual-conference-2019

Happy Independence Day!

July 4, 2019 marks America’s 243rd birthday!

Fireworks and freedom: That’s what America does on the Fourth of July to celebrate the country’s birthday, established with 56 founding fathers’ pen strokes on the Declaration of Independence in 1776. We also eat a whole lot of hotdogs: 150 million in total. We make a toast or two to freedom and good old Uncle Sam, shelling out more than $1.6 billion on July Fourth beer and wine. And we travel, with nearly 47 million of us planning to venture 50+ miles from home this year.

Have a safe and happy 4th of July!

Image result for happy 4th of july pictures

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Axios: Latest and Greatest Healthcare Updates

Pretty unreal the concentration of just a few firms that support certain sectors within the healthcare insurance system and how that artificially increases pricing due to lack of competition.

1 big thing: Our health care system is full of monopolies

Even the behind-the-scenes parts of the health care industry are dominated by a small handful of companies — and critics say that drives up prices for everyone, Axios health care editor Sam Baker reports.

Why it matters: The U.S. spends more than any other industrialized country on health care, largely because our prices are higher. And the monopolies that support those high prices could undermine both liberal and conservative dreams of a more efficient system.

The big picture: This is a trend that’s happening at every level.

  • Hospital systems continue to merge with each other and gobble up doctors’ practices, which lets them charge more for the care they provide.
  • Insurers and pharmacy benefit managers are also merging, and are now on track to bring in more revenue than the tech industry’s biggest powerhouses.

Yes, and: That trend toward concentration extends throughout the system, even into sectors that most patients never directly interact with, according to new data from the Open Markets Institute, shared first with Axios.

  • As long as we’re talking about hospitals, for example, let’s look at their suppliers: One company controls 64% of the market for syringes, according to OMI’s data. Just 3 companies control 86% of the market for IV solution. Two companies make 47% of hospital beds.
  • None of those sectors is particularly huge — syringes are the biggest, with $3.8 billion in annual revenue. But in a system that’s already not very competitive, each step without competition feeds into the next one.

“America’s health care crisis is brought you by monopoly,” Open Markets policy director Phil Longman said.

Go deeper.

2. California’s new health care milestones

California Gov. Gavin Newsom
California Gov. Gavin Newsom. Photo: Kevork Djansezian/Getty Images

California will become the first state in the nation to pay for the health benefits of some unauthorized immigrants, after state lawmakers struck a deal yesterday, the AP reports.

  • California will also be the first state to extend the Affordable Care Act’s premium subsidies up the income scale. The deal includes a proposal to provide subsidies to middle-income people making up to 6 times the federal poverty level.

Details: Low-income adults between ages 19 and 25 living in the state illegally will qualify, based on their income, for the state Medicaid program.

  • Officials estimate that this will be about 90,000 people costing $98 million a year.
  • To help pay for the deal, the state will tax the uninsured — a revival of the ACA’s individual mandate.

The bottom line: One of the bluest states in the nation’s measured steps toward universal health coverage show the uphill battle liberals face in their push for Medicare for All.

  • But even these more incremental steps demonstrate how far left Democrats have moved in the decade since the ACA’s passage.
  • “California has taken the lead to blunt Republican efforts nationally on a whole range of health care issues, moving very much in the opposite direction,” emailed the Kaiser Family Foundation’s Larry Levitt.

Go deeper: In California’s blue utopia, liberal health care dreams stagnate

3. Not all CEOs hate Medicare for All

Although most large business groups strongly oppose Medicare for All, the opinions of some members of the business community — especially small employers — may be changing, Kaiser Health News reports.

  • The Business Alliance for a Healthy California, which has tried to garner business support for a universal health care program in the state, has attracted almost 300 mostly small employers.
  • One of the co-founders of the group, Dan Geiger, said large companies don’t want to get involved because of their ability to use health benefits to attract talent.
  • It’s also difficult to sign onto the general concept before details are fleshed out, like how much taxes would go up, KHN reports.

The big picture: Most Americans under 65 get their health insurance from their job, meaning that employers have a ton of political sway as the debate over Medicare for All heats up.

  • Employer coverage has become more of a financial strain, and in some cases unaffordable, as deductibles have gone up in tandem with the cost of medical care.
  • And as more Americans age into Medicare, the situation looks increasingly bleak for employers and workers, as providers are expected raise private insurance rates to recoup for Medicare’s lower reimbursements.

Go deeper:

4. ALS patients push for approval of new therapies

A group of ALS patients is planning to protest outside of the FDA this week, hoping in some ways to replicate the protests of AIDS activists in the 1980s who were also upset with the pace of the search for treatment, Stat News reports.

  • The patients had hoped to see quicker results from the $115 million raised by the ALS ice bucket challenge. They also advocated for the “right to try” legislation passed last year, and are similarly disappointed with the lack of results from that.
  • They’re also frustrated by the news that other breakthrough new therapies have been approved for other diseases.

Like the AIDS activists in the 1980s, the patients have a list of specific therapies they want approved.

  • The 3 on the list are in different stages of development, but the ALS patients want them to be fast-tracked through the approval process.
  • Top officials with the FDA have invited the protesters to meet with them, as long as the drug makers also attend.

The other side: “These people are desperate, I can see that. I see them every day, it’s a horrible disease,” Jonathan Glass, the director of Emory University’s ALS Center, told Stat.

  • “But fast-tracking things that don’t work, or may not work, or might even be harmful is not the way to go.”

5. While you were weekending

  • The FDA sent warning letters to vaping companies for inappropriately promoting flavored products through social media influencers, AP reports.
  • The New York Times dove into one group’s efforts to raise the standards around geriatric surgery, which has higher complication rates than procedures undergone by younger patients.
  • Solving the HIV crisis will require more than just medicine — “It would ideally involve a full-scale attack on poverty, racial, economic and educational inequalities and long-held stigmas,”  Politico reports.

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