January 10, 2020

2 Min Read
New Federal Overtime Regulations Could Affect Self-Storage Operators

New federal overtime regulations that went into effect on Jan. 1 could affect self-storage operators. The U.S. Department of Labor (DOL) issued its final rule update for overtime pay in September. An additional 1.3 million American workers are now eligible to collect overtime pay, according to the DOL.

Under the Fair Labor Standards Act (FLSA), the new overtime rule raises the pay threshold for exempt workers to $35,568 per year or $684 per week, from the current level of $23,660 per year or $455 per week. In addition, employees must be paid a salary of at least the minimum salary threshold and meet certain duties tests to be exempt from overtime under the FLSA. If either the salary threshold or the duties test isn’t met, an employee must be paid overtime at time-and-a-half pay for hours worked beyond 40 in a single work week.

There are four situations in which employees with a minimum salary can be exempt from the overtime rule. Staff who manage two or more people and whose duties are primarily managerial are typically exempt, as well as professionals such as doctors, attorneys and certified public accountants. Likewise, administrative professionals working in information technology, human resources and finance could be exempt. This doesn’t include administrative assistants, who are almost all non-exempt and eligible for overtime. Lastly, outside sales representatives will qualify if the majority of their work is done outside an office.

Changes to the federal minimum salary threshold for overtime pay haven’t been made since 2004. Although this is a federal law, individual states can set limits beyond the minimum standards. California’s new overtime law also went it effect on Jan. 1. The minimum salary exemption is $49,920 for employers with 25 employees or less, and $54,080 for those with more than 25.

Sources:
Gov Docs, FLSA Update: Department of Labor Issues Final Rule on Overtime Pay
Inc., 2020. Are You Ready?

 

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