Latest News

The Department of Labor (DOL) has released its final overtime rule, significantly increasing the minimum annual salary threshold determining overtime pay eligibility under the Fair Labor Standards Act (FLSA) from $35,568 to $58,656.

The rule will gradually come into effect, with an increase to $43,888 on July 1, 2024, and an increase to $58,656 effective January 1, 2025.

The Details: DOL sets a salary threshold to ensure eligible employees receive overtime pay for all hours worked over 40 in a workweek.

1. Using 2023 data, the new salary threshold equals $1,128 per week or $58,656 annually for a full-year worker.
2. The rule also increases the salary threshold for the highly compensated employee (HCE) exemption from $107,432 to $151,164 annually.
3. The HCE exemption will also gradually come into effect, with an increase to $132,964 on July 1, 2024, and an increase to $151,164 effective January 1, 2025.

What’s New: The final rule includes an automatic update to the overtime threshold every three years based on available wage data at that time.

1. The DOL expects to announce the first such update on July 1, 2027, which will affect both the standard salary and HCE thresholds.
2. This methodology was specifically opposed by the National Restaurant Association and Restaurant Law Center in comments submitted last year.

Who’s Affected: Unless specifically exempted, an employee covered by the FLSA must receive pay for hours worked over 40 in a workweek at a rate not less than one and one-half their regular pay rate.

1. Beginning on July 1, 2024, any employee earning under $43,888 will be owed overtime pay.
2. On January 1, 2025, any employee earning under $58,656 will be owed overtime pay.
3. This means that employees who were previously exempt from overtime pay may now be eligible, and employers may need to adjust their pay structures and work schedules accordingly.
4. Please see the DOL fact sheet linked here for information on determining if an employee is exempt.

​Go Deeper:
​
DOL: Final Rule on Overtime
DOL: Final Rule on Overtime FAQ
DOL: Final Rule Earnings Threshold Chart
Association/RLC: Comments on Proposed Rule
Association/RLC: Webinar on Proposed Rule