Understanding the Department of Labor’s New Overtime Regulation

The Department of Labor introduced a new overtime regulation significantly increasing the threshold for exempt workers across the United States.

Exemptions to the Overtime Requirements

Certain categories of workers, such as bona fide executive, administrative, or professional employees, are exempt from the FLSA’s minimum wage and overtime provisions. To qualify for this exemption, employees must meet specific criteria related to salary and job duties.

The New Rule

Prior to the Department of Labor’s new rule, the salary threshold for exempt employees was $684 per week ($35,568 annually). Effective July 1, 2024, the standard salary level for exemption from overtime eligibility will increase, with most salaried workers earning less than $844 per week ($43,888 annually) becoming eligible for overtime pay. This threshold will further rise to $1,128 per week ($58,656 annually) on January 1, 2025, extending overtime protections to additional workers.

Looking Ahead

As the new overtime rule takes effect, employers should familiarize themselves with its provisions to ensure compliance and understand its implications. Employers should review compensation data and determine how currently exempt employees making between $684 per week and $1,128 per week will be impacted. Employers will have to evaluate whether to increase the affected employees’ salaries or to convert them to non-exempt employees, who must be paid overtime if they work more than forty hours per week.

Stay informed about developments in labor and employment law and how they may impact your organization by following our blog. For personalized guidance on navigating the new overtime regulation, contact our team today.