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OHIO OVERTIME LAWS 2020

New Ohio Overtime Laws

What are the Overtime Laws in Ohio and should you be paid overtime even if your employer calls you salary? The Ohio Overtime Laws changed in 2020 because new federal regulations that govern overtime and exemptions were issued by the Department of Labor.

Highlights:

  • New overtime laws took effect January 1, 2020.
  • “Exempt” means your employer does not have to pay you overtime rates for hours worked over 40 in a single workweek.
  • To qualify as “exempt” your employer must pay you a guaranteed minimum salary each week, and your primary job duties must fall into a specific category (Overtime Exemptions: Executive, Administrative, Professional, Computer Related, Outside Sales)
  • Salary Minimum Raised to $684 per week, or $35,568 annually (previously $455 per week, or $23,660 annually) – If you do not make at least $684 per week, then your employer must pay you overtime.
  • Employer can count non-discretionary bonuses or other incentive payments, such as commissions, towards the employee’s weekly salary to determine whether the salary minimum is met (with limitations).
  • Annual Minimum for Highly Compensated Employees Increased to $107,432.00 per year (previously $100,000 per year)

On January 1, 2020, the Department of Labor instituted some major changes to the Fair Labor Standards Act (“FLSA”), the federal law governing employee wage and hour claims.  These changes directly impact Ohio Overtime Laws. These changes updated the income thresholds employees must meet in order to be exempt from overtime pay requirements in Ohio. The calculation of employees’ weekly salaries, for purposes of determining their income threshold, also changed. Employers may count certain bonuses and incentive payments earned by employees towards their weekly income for purposes of establishing an overtime exemption. For more information about the Fair Labor Standards Act or Ohio Overtime Laws 2020, check out our practice areas page.

Generally, these changes make it more difficult for employers to claim you are exempt from overtime pay requirements, and as a result, over one million employees throughout the US who were previously exempt from overtime compensation are now entitled to overtime pay. Our Columbus, Ohio wage and hour attorneys break down each of these major changes below.

Increase in Salary Minimum Thresholds for Ohio Overtime Pay Exemptions

In order for employers to claim that its white-collar workers are exempt from the overtime pay requirements of the FLSA and Ohio Overtime Laws, it must prove, among other requirements, that they meet the “salary basis test.” Under the pre-January 1, 2020 test, employees must have been paid not less than $455.00 per week to meet this test. However, beginning on January 1, 2020, this income threshold has increased to $684.00 per week, or $35,568.00 per year for full-time employees. If you make less than $684.00 per week but you are still classified as an exempt employee, give us a call, because you may be owed overtime wages.

The FLSA and Ohio Overtime Laws also exempt highly compensated employees from overtime pay requirements when certain requirements are met. Prior to January 1, 2020, a “highly compensated employee” was defined as someone who made over $100,000.00 per year, and at least $455.00 per week. However, beginning on January 1, 2020, this annual income threshold has increased to $107,432.00 per year (and at least $684.00 per week according to the above rule). Thus, if you were previously classified as a highly compensated employee but you make less than $107,432.00 per year, you no longer fall under the highly compensated employee overtime exemption.

Bonus and Incentive Payments for Salary Employees

The Department of Labor has also instituted a change in how employees’ weekly salary amounts are calculated for purposes of the salary basis test above. If an employee receives non-discretionary bonuses or other incentive payments, such as commissions, at least once per year, then the employer can count those payments towards the employee’s weekly salary to determine whether the salary basis test set forth above is met.

However, there is an important limit to this new rule: employers may only use employee bonuses and incentive payments to account for a maximum of 10% of the standard salary level. Thus, employers can only use employee bonuses and incentive payments to account for a maximum of $68.40 per week (10% of the new $684.00 salary threshold). For example, if an employee makes $500 per week, and then he makes an additional $2,000 that week on commission, he earns a total of $2,500 that week. However, only $68.40 of his $2,000 commissions earned is counted towards the employee’s weekly salary for purposes of the salary basis test. Thus, while the employee’s actual weekly income far surpasses the $684.00 per week threshold, only a total of $568.40 counts towards his weekly income for purposes of the salary basis test, so this employee would NOT be exempt from overtime pay during this workweek.

If you believe you are owed overtime pay, or if you have other questions about Ohio Overtime Laws or employment, please reach out to us for a free consultation.

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