2020 DOL Changes:
Beginning January 1, 2020, the Department of Labor has updated the standard salary level for overtime exemption for Executives, Administrative, and Professional employees as well as the salary level for Highly Compensated Employees. Please see below for additional information.
Standard Salary Level
The Department is setting the standard salary level at $684 per week ($35,568 for a full-year worker). The salary amount accounts for wage growth since the 2004 rulemaking by using the most current data available at the time the Department drafted the final rule. The Department is updating the standard salary level set in 2004 by applying to current data the same method and long-standing calculations used to set that level in 2004—i.e., by looking at the 20th percentile of earnings of full-time salaried workers in the lowest-wage census region (then and now the South), and/or in the retail sector nationwide.
Highly Compensated Employee Total Annual Compensation Requirement
The Department is setting the total annual compensation requirement for HCEs at $107,432 per year. This compensation level equals the earnings of the 80th percentile of full-time salaried workers nationally. To be exempt as an HCE, an employee must also 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).
2020 Tax Updates:
Below you will find a Federal Tax Update Summary Card that give many of the general tax updates for the 2020 tax year:
2020 Federal Tax Key Facts and Figures (this link opens a .pdf file and will open in a new window).
Overall there weren't many major changes in the 2019 to 2020 tax years as most of the Tax Cut and Job Act (TCJA) changes occurred beginning 2018. These TCJA changes are only temporary and are set to go through the year 2025. There has been a lot of talk about making these changes permanent, but nothing has been passed yet. We will keep you updated if and when this occurs.
If you have any questions on the above, or anything we can help with, please feel free to contact us.
Moats & Associates, CPAs
2020 DOL change to overtime exempt employees & Federal Tax Updates
2100 S. Ridgewood Ave., Ste. 7, South Daytona, FL 32119
Phone: (386) 760-3083 Email: Reception@Moats-CPAs.com