New FED Labor Law may impact veterinary practices

new federal rule will extend overtime pay requirements to more workers as of January 1, 2020. Some veterinary practices and employees could be affected by the U.S. Department of Labor rule.

The rule raises the earnings thresholds for workers to be exempted from the Fair Labor Standards Act (FLSA) requirements that workers be paid overtime pay of at least 1.5 times their regular pay rate for any hours worked in excess of a 40-hour workweek. The Department of Labor estimates that 1.3 million workers will become newly eligible for overtime pay.

Key provisions of the final rule

According to the Department of Labor, the new earnings thresholds reflect growth in employee earnings and recognition of evolving pay practices since the last update in 2004. The department says the new rule should help employers more readily identify exempt employees. The update to the rule does the following:

  • Raises the earnings level at which employees are exempt from overtime pay requirements, known as the “standard salary level,” from $455 per week to $684 per week (equivalent to $35,568 per year)
  • Raises the total annual compensation requirement for workers to be exempted as “highly compensated employees” from $100,000 per year to $107,432 per year
  • Allows employers to use certain bonuses and incentive payments, including commissions, to satisfy up to 10% of the “standard salary level,” as long as those payments are made at least once a year
  • Revises the special salary levels for workers in U.S. territories and the motion picture industry

Understanding the rule

The following resources can help with understanding and implementing the rule:

The rule was announced by the Labor Department on September 24.

Advocating for veterinarians and small businesses

AVMA’s advocacy work includes helping AVMA members understand laws that impact veterinarians and veterinary businesses. The AVMA also advocates in Washington for policies that help veterinarians thrive in rewarding and financially sustainable careers – including policies that make sense for small business owners and employees.

By the AVMA@Work Editor

Posted November 15, 2019