DOL Final Overtime Rule Takes Effect January 1, 2020

On September 24, 2019 the U.S. Department of Labor (DOL) issued a revised Final Overtime Rule increasing the minimum salary threshold for overtime exemption to $35,568. The Final Overtime Rule takes effect on January 1, 2020.

The DOL’s Final Overtime Rule increases the weekly salary threshold for minimum wage and overtime exemption under the Fair Labor Standards Act (FLSA) from $455 to $684 (an increase in the annual minimum salary from $23,600 to $35,568). The Final Overtime Rule also increases the minimum annual exemption salary threshold for highly compensated employees (HCEs) from $100,000 to $107,432.

The minimum salary thresholds for FLSA exemption under the DOL’s Final Overtime Rule differ slightly from those the DOL previously proposed in March 2019. The DOL’s Final Overtime Rule increases the minimum weekly salary threshold from a proposed $679 to $684, and decreases the minimum HCE annual exemption salary threshold from a proposed $147,414 to $107,432.

As expected, the DOL’s Final Overtime Rule allows employers to count certain nondiscretionary bonuses and incentive payments (including commissions) as up to 10 percent of an employee’s standard salary level, so long as the additional payments are made at least annually. Accordingly, employers can bump up an employee’s earned salary with a bonus to meet the minimum salary standard. The Final Overtime Rule also revises designated salary levels for employees in the motion picture industry and employees working in certain U.S. territories. The salary thresholds under the DOL’s 2020 Final Overtime Rule will update every four years following a notice and comment period.

Employers have the remainder of 2019 to comply with the DOL’s Final Overtime Rule.

Drinker Biddle will provide detailed information regarding the Final Overtime Rule in future blog posts. The full text of the Final Overtime Rule is available on the DOL website at www.dol.gov/whd/overtime2019/.

Part 24 of “The Restricting Covenant” Series: Choice of Law and Covenants Not to Compete

There are many notable east coast-west coast rivalries.  In sports (Celtics versus Lakers basketball), in leisure (Atlantic versus Pacific beaches), or in food (Shake Shack versus In-N-Out Burger), to name a few.  With respect to restrictive covenants, the conflict between Delaware, which is generally considered a “pro-enforcement” jurisdiction, and California, which is generally considered an “anti-enforcement” jurisdiction, definitely stands out in the crowd.  This installment of the Restricting Covenant Series looks at the competing views of the Golden State and The First State’s on the enforceability of restrictive covenants, and the critical importance of conducting a “choice of law” analysis to settle this feud.

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Do You Have Independent Contractors in California?

If so, you should be on alert about California Assembly Bill 5 (AB5), a bill based on the California Supreme Court’s decision in Dynamex v. Superior Court.* If it becomes law, AB5 will have wide-ranging repercussions for companies that rely on independent contractors in California.

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Maine and New Hampshire Join National Trend, Enacting Laws Prohibiting Non-Competes for Lower-Wage Workers

As we have previously discussed, there is an ongoing trend of states prohibiting the use of non-compete agreements in certain situations, including with lower-wage workers. Maine and New Hampshire are the most recent examples.

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Landmark Chicago “Fair Workweek” Ordinance Entitles Employees to Pay for Schedule Changes and Lost Work Hours

On July 23, 2019, the Chicago City Council passed the controversial Chicago Fair Workweek Ordinance (the Ordinance). Once Chicago Mayor Lori Lightfoot, a vocal proponent of the Ordinance, signs it into law, the Ordinance is scheduled to take effect for the majority of covered employers on July 1, 2020.

The Chicago Ordinance covers:
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New Jersey Expands Employment Protections to Medical Marijuana Users

New Jersey recently joined a growing number of states, including Arizona, Arkansas, Connecticut, Delaware, Illinois, Maine, Massachusetts, Minnesota, Nevada, New York, Oklahoma and Rhode Island, that afford certain job protections to employees and applicants who use medical marijuana.

On July 2, 2019, New Jersey Governor Phil Murphy signed the Jake Honig Compassionate Use Medical Cannabis Act into law, which significantly amended and expanded the New Jersey Compassionate Use Medical Marijuana Act, N.J.S.A. 24:61-2 et seq.

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