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The New Federal Overtime Rule Explained
The federal Department of Labor raised the minimum salary required to keep workers exempt from overtime to $35,568 per year ($684/week) from $23,660 per year effective January 1, 2020. Keep in mind that, in addition to meeting the salary threshold, employees’ work must meet the “duties tests” required for overtime exemption. Paying employees at the minimum salary threshold, alone, is not sufficient to make an employee exempt from overtime.
Still concerned? You can do a couple of quick checks to maintain your company’s compliance:
- Look at the employees who you consider to be exempt and see who falls below the new $35,568 threshold ($684/week).
- If those employees regularly work enough overtime to elevate their pay above the threshold, consider increasing those salaries to $36,000 or more to clear the threshold.
- Make sure that, in addition to meeting the salary threshold, any employees who you treat as “exempt” also meet the “duties tests” required to claim the exemption.
- The rules differ for highly compensated employees and those paid by commission – Fact sheets from the Department of Labor are available here for more information.
Want some specialists to take a look at your exempt and non-exempt employees? Need to update your employment agreements and handbook to reflect the changes? Reach out to Council Baradel Employment Lawyers Susan Stobbart Shapiro (ranked by Super Lawyers as one of the top 100 attorneys in the state), and Tova Z. Brody (who headed an HR department for a business with 120 employees prior to becoming an attorney) to answer your questions and ease you into the new year.
Effective January 1, 2020, the State of Maryland increased its minimum wage to $11.00/hour for most businesses. Montgomery and Prince George’s Counties are following a slightly different schedule. Links to those schedules, as well as the schedule for statewide increases to the minimum wage, are available below. The increase is part of an initiative that began in 2017 to increase the living wage for employees and reduce the use of public funds to help subsidize rising costs of living.
Included with the wage increase are new rules regarding tipped employees. From the Maryland Department of Labor:
Tipped Employees (earning more than $30 per month in tips) must earn the State Minimum Wage Rate per hour. Employers must pay at least $3.63 per hour. This amount plus tips must equal at least the State Minimum Wage Rate. https://www.dllr.state.md.us/labor/wages/wagehrfacts.shtml
Unless your employees qualify for an exemption from minimum wage and/or overtime, these new rules apply to them. The start of the New Year is an ideal time to check your books and make sure you have a smooth 2020.
Have questions or concerns about your employee wages? Need to ensure you are classifying the right employees as exempt? Reach out to Council Baradel Employment Lawyers Susan Stobbart Shapiro (ranked by Super Lawyers as one of the top 100 attorneys in the state), and Tova Z. Brody (who headed an HR department for a business with 120 employees prior to becoming an attorney) to answer your questions and ease you into the new year.
Link to Maryland Minimum Wage and Overtime Law Poster.
Links to Minimum Wage and Overtime Posters for Montgomery County and Prince George’s County.
Council Baradel is pleased to announce that Tova Z. Brody has been admitted to the Maryland Bar and has joined the firm as an employment law associate.
Tova focuses her practice on labor and employment matters. She earned her Bachelor’s degree in Political Science from Touro College – Lander College for Women in New York, and graduated magna cum laude from the University of Baltimore School of Law.
Prior to joining Council Baradel, Tova worked as a Human Resources Director for a Baltimore based company with 120 employees. During her tenure there, Tova built the HR department, revamped the company’s policies and procedures, implemented fair and streamlined screening and hiring practices, increased employee benefits, designed and implemented a performance evaluation program, created comprehensive onboarding and training programs, and advised the executive team on strategies for increasing employee retention and reducing liability through preemption and compliance.
Tova can be reached at Brody@CouncilBaradel.com or 410-268-6600.
Maryland employers should be aware that the minimum wage in Maryland will increase to $10.10 per hour effective July 1, 2018. Montgomery County employers will have a different, higher rate: $12.25 per hour if the employer has 51 or more employees and $12.00 per hour if the employer has 50 or fewer employees. Prince George’s County’s minimum wage will remain at $11.50 per hour.
Employers who use the tip credit, such as restaurants, should revise their tip credit notices to reflect the change and have each affected employee sign the notice.
Additional detail, and updated poster forms, can be obtained through the Maryland Department of Labor, Licensing and Regulation’s overtime web page. Council Baradel employment law attorneys Susan Stobbart Shapiro and Steven A. Brown are available to answer any questions you may have.
Maryland has passed the Maryland Healthy Working Families Act (“MHWF”) – which has been commonly referred to as “the sick leave bill.”
With very few exceptions, Maryland employers are required to provide employees with sick and safe leave, and with notice regarding that leave, and to keep certain records tracking that leave. Depending on an employer’s size, leave is either paid or unpaid. Broadly speaking, certain employees may use the leave to care for themselves or certain family members who are sick, who are seeking preventative medical care, or who have suffered from domestic violence, sexual assault or stalking.
Some businesses will find that parts of their existing leave policies and systems are already compliant with the MHWF; however, most will need to tweak their policies, procedures and notices to encompass all of the requirements of the new law.
The MHWF tasks Maryland’s Department of Labor, Licensing and Regulation with creating form policies and notices; however, that work is not yet done.
Please let us know if you’d like to discuss your leave policies, notices and record-keeping to see whether they are compliant with the new law and, if not, what changes would make them compliant.