2020 Employment Compensation Law Changes for Businesses

We have compiled some of the federal employment law changes for 2020 that became effective January 1st that may affect your business. Below are a few of the changes you should know for 2020.

**New Overtime Pay Rule ** The US Department of Labor added a new rule that will make 1.3 million American workers now eligible for overtime pay. They announced this new rule is effective January 1, 2020. The US Department of Labor raised the “standard salary level” from $455 per week to $684 per week, which is $35,568 a year for a full-time worker. They raised the “highly compensated employees” compensation from $100,000 a year to $107,432. Employers can use bonuses, incentives, commissions to satisfy up to 10% of the standard salary level. You can read the Overtime Final Rule and additional information here.

Minimum Wage Increases for 2020 in 21 States

Minimum wage increased in 21 states for 2020. Alaska, Florida, Minnesota, Montana, Ohio, South Dakota, and Vermont automatically increased their rates based on the cost of living. Arizona, Arkansas, California, Colorado, Illinois, Maine, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New Mexico, New York, and Washington increased minimum wage rates due to previously approved legislation or ballot initiatives.

The Fair Labor Standards Act (FLSA) includes overtime exemptions for Executive, Administrative, Professional, Computer & Outside Sales Employees.

• To qualify for the Executive exemption, the employee must be paid a salary of at least $684 a week, and their primary duty must be managing the business, or subdivision of the business. The employee must manage at least two full-time employees and have an impact on the hiring, firing, promotion or other status of the employees they oversee.
• To qualify for the Administrative exemption, the employee must be paid a salary of at least $684 a week. The employee’s primary duty must be the performance of office or non-manual work related to the management or business operations of the and the employee’s primary duty includes the exercise of discretion and independent judgment concerning matters of significance.
• To qualify for the Professional exemption, the employee must be paid a salary of at least $684 per week. The employee’s main duty must be work requiring advanced knowledge in a field of science or learning; that they acquired by a prolonged course of specialized instruction, or work involving invention, imagination, originality or talent.
• To qualify for the Computer exemption, the employee must be paid either a salary or fee basis at least $684 per week or, an hourly basis, at least $27.63 an hour. The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled workers in the computer field. The employee’s primary duty must include the application of systems analysis techniques and procedures, the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or a combination of the duties listed.
• To qualify for the Outside Sales exemption, the employee’s primary duty must be making sales or acquiring orders or contracts for services and the employee must be regularly engaged away from the employer’s place or places of business.

Our experienced team has created instructions for our GrowPoint Payroll customers to make your job easier. Here are instructions on how to implement payroll in GrowPoint for the Washington state FMLA law that went into effect January 1, 2019. We also have instructions to implement the Oregon Saves program for retirements savings, handle Rest Break calculations for piecework pay, accrue Paid Sick Days in Washington and California.If you would like to learn more about how we can help improve your business, or schedule a demo, click here.

This is intended as highlights of 2020 new laws only and does not constitute legal or financial advice. If you need legal advice, please consult your attorney or expert on the law.