Final Overtime Rule

By: Angel Berberena, Esq.

September 25, 2019

The U.S. Department of Labor (US DOL) updated and revised the overtime rule issued under the Fair Labor Standards Act implementing the exceptions from minimum wage and overtime pay requirements for executives, administrative, professional, outside sales, and computer employees. The final rule, to become effective on January 1, 2020, updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA's minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. In the final rule, the US DOL:

  • raises the "standard salary level" from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
  • increases the total annual compensation level for "highly compensated employees (HCE)" from the currently-enforced level of $100,000 to $107,432 per year;
  • allows employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices; and
  • revises the special salary levels for workers in U.S. territories and in the motion picture industry.

Regarding Puerto Rico, the US DOL sets a special salary level of $455 per week[1]. It is the US DOL position that the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA)[2] does not apply to this final rule as it is a new rulemaking not related to the 2015 overtime rule within the meaning of PROMESA. However, Section 404 of PROMESA reflected Congress's apprehension with increasing the salary level in Puerto Rico, and given the current economic climate, the US DOL proposed to set a special salary level in Puerto Rico of $455 per week-the level that currently applies under PROMESA.

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[1] The special salary tests do not apply to employees of the Federal government employed in Puerto Rico.
[2] Pub. L. 114-187, 130 Stat. 549 (June 30, 2016)

Goldman Antonetti & Córdova, LLC stands ready to assist you and your business to adjust to Puerto Rico's regulatory and legal changes. If you need further assistance in this area, please contact any of the following members of our firm:

Angel Berberena 787.759.4149
Luis Antonetti 787.759-4111
Vicente Antonetti 787.759.4112
Romel Meléndez 787.759.4115
Luis Ortiz Abreu 787.759.4110
Howard Pravda 787.759.4101
Gabriel Quintero 787.759.4130
Jorge Rodíguez Micheo 787.759.4102
Javier Vazquez 787.759.4113

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