Beginning January 1, 2020 1.3 million exempt employees are going to become eligible for overtime according to a new ruling by the US Department of Labor. Per an amendment of the federal Fair Labor Standards Act (FLSA) the minimum salary will be increased to $35,568 annually, or $684 weekly. Currently, it is $23,660 per year, or $455 per week. This will impact the compensation packages of several non-immigrant foreign workers who
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The biggest impact is going to be on employees who are working exempt but not making the minimum threshold. They will now be non-exempt and be eligible for overtime compensation at 1.5 times over the salary range.
Are You Eligible for Overtime Salary on a H1-B Work Visa?
While most non-immigrant workers coming into the US on a H1-B work visa already make the cut for the upper salary threshold as they are hired as specialty workers having a minimum educational qualification of at least a Bachelor’s degree in their field and are almost always an exempt employee, except in the case of contractual workers. Several occupations that recruit H1-B workers include skilled workers in the computer field, healthcare and finance, mathematics and science.
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A non-immigrant worker is considered exempt from the new ruling if they meet the following criteria. This covers both salary as well as job duty definitions:
- Be salaried and not compensated on an hourly basis
- Already meets the minimum FLSA salary threshold of $35,568 per year starting in 2020.
- Perform executive, administrative, and professional job duties
- Owned more than 5% of the interest in a business at any time during the year or preceding year
- Received compensation from the business of more than $125,000 in 2019 and was in the top 20% of employees when ranked by compensation.
- Computer systems analysts who apply systems analysis techniques and procedures, including consulting with users to determine hardware, software, or system functional specifications
- Software engineers who design, develop, document, analyze, create, test, or modify computer systems or programs, including prototypes, based on and related to user or system design specifications
- Computer programmers who are involved in designing, documenting, testing, creating, or modifying computer programs related to machine operating systems.
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How Does the New Salary Ruling Affect Contract Workers on a Non-Immigrant Visa?
It does not affect independent contract employees who may be working off-site at a client location. The FLSA does not cover independent contractors, who are brought in to by a US employer to work on specific projects. To be noted, if the contractor is employed by a single employer, the FLSA could apply. They should talk with a reliable immigration lawyer to clarify their position nd compensation expectations.