© 2019 American Payroll Institute, Inc. DOL Raises Weekly ‘White Collar’ Salary Threshold to $684 in 2020 Oreleased n September 24, the U.S. Department of Labor (DOL) the final rules increasing the minimum salary level for the Fair Labor Standards Act (FLSA) “white collar” exemptions to $684 per week or $35,568 a year (up from $455 a week or $23,660 a year) beginning on January 1, 2020. The final rules were published in the Federal Register on September 27 [84 F.R. 51230, 9-27-19]. The required amount of compensation per week may be translated into equivalent amounts for periods longer than one week. This translates to a salary threshold of $1,368 for employees paid on a biweekly basis, $1,482 for employees paid on a semimonthly basis, and $2,964 for employees paid monthly. The rule sets the standard salary level at the 20th percentile of earnings of full-time salaried workers in the lowest-wage region (the South) and/or in the retail industry nationally. The DOL has also published a Fact Sheet and Frequently Asked Questions concerning the final rule. Background The minimum white collar exemption salary level was last updated in 2004. In 2016, the DOL issued a final rule that would have raised the salary level to $913, but the rule was invalidated by a court order. In March, the DOL proposed rules that would have set the salary level at $679 per week (see PAYROLL CURRENTLY, Issue 4, Vol. 27). The final regulations are similar to the proposed regulations. Changes include a small increase in the standard salary level and a large decrease in the annual compensation requirement for highly compensated employees (HCEs). Other provisions in the final rule Effective January 1, 2020, the final rule: Raises the total annual compensation requirement for HCEs to $107,432 (up from $100,000 per year). The rule sets the total annual compensation level at the 80th percentile of full-time salaried workers nationally. As part of an exempt HCE’s annual compensation, the employee must receive at least the new standard salary amount of $684 per week on a salary or fee basis (without regard to the payment of nondiscretionary bonuses and incentive payments). The Inside this issue... Employers Should Prepare Now for Updated ‘White Collar’ Thresholds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 IRS Issues Federal ‘High-Low’ Per Diem Rates Effective October 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 DOL Updates Minimum Wage for Federal Contractors for 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 DOL Issues Three Opinion Letters on FLSA, FMLA, CCPA Topics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 USCIS Reminds Employers of Responsibilities During Disasters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 EEOC Seeks to Renew Component 1 Data Collection, Drop Component 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 APA to Present Year-End Compliance Seminar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 IRS Updates Electronic Return Specifications for 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 IRS Thanks Payroll, Discontinues W-2 Verification Code Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 DOL Submits Regular Rate Rule for Regulatory Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 IRS Issues Final Regs on Hardship Distributions for 401(k). 403(b) Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Payroll Solutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Daylight Saving Time Ends November 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Court Does Not Defer to DOL Guidance on Tipped Workers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Free eBook Answers Top Payroll Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 DOL Announces Nationwide Compliance Assistance Outreach Effort. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 IRS Can Require Employers to Use the Same EIN on All Information Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Nacha Unveils Campaign to Encourage Direct Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 IRS Encourages Employers to Have Employees Do a ‘Paycheck Checkup’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Update on DOJ Tax Division Employment Tax Enforcement Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 State and Local News. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 October 4, 2019 Volume 27 Issue 10
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