Employment Law

New Federal Rule for Overtime Workers

By May 6, 2024 No Comments

On April 23, 2024, the U.S. Department of Labor issued a new final rule that raises the salary threshold for exempt salaried workers. If you are paid a salary, and work over 40 hours in a week but are classified as overtime exempt, meaning you are not paid overtime, this new rule may affect you. Under the new rule, millions of workers may now be entitled to overtime.

Under the federal Fair Labor Standards Act (FLSA) workers must generally be paid overtime at 1.5 times their regular pay rate unless they are “exempt” or ineligible for overtime. The new final rule applies to workers who are classified as exempt under the Administrative, Executive, Professional, Outside Sales, and Computer exemptions. These are also known as “white collar” exemptions. Under these exemptions, employees with certain duties, like management, sales, or computer programming, are not entitled to overtime if they were paid a certain amount in salary. Before the new rule was implemented, the salary threshold or minimum for workers who were classified as exempt under these exemptions was $684 per week and $35,568 per year.

Under the new final rule, the salary threshold will rise on July 1, 2024, to $43,888 per year and will rise again to $58,656 per year on January 1, 2025. The new rule will also raise the overtime salary threshold for “highly compensated” employees to $132,964 per year on July 1, 2024, and again to $151,164 per year on January 1, 2025. This is up from the existing threshold of $107,432 per year.

According to the Department of Labor, the new rule will make 4.3 million salaried workers eligible for overtime by January 1, 2025. If you are a salaried worker who does not get paid overtime, you may become eligible for overtime if your salary is below the current or future thresholds. Likewise, if you are classified as a highly compensated employee, you may be entitled to overtime if your salary is below the new minimum.

If you have any questions about eligibility for overtime, call the experienced attorneys at Bohrer Brady, LLC for a free, confidential initial evaluation at (800) 876-3911, or email info@bohrerbrady.com.