News
The Catch-Up Payment Provision for Overtime Exempt Employees
Posted 11.01.20
The U.S. Department of Labor’s (DOL) final rule on defining and delimiting the exemptions for executive, administrative, professional, outside sales and computer employees (EAP employees) became effective Jan. 1, 2020. Among other things, the final rule updated the standard salary level employees must satisfy to qualify for an overtime exemption.
The final rule also allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level if these payments are made at least on an annual basis.
To enable compliance with the nondiscretionary bonus option, the final rule allows employers to make a “catch-up” payment at the end of each 52-week period. This Compliance Overview explains how this provision can be used.
The Catch-Up Payment Provision for Overtime Exempt Employees