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DOL Overtime Rule Takes Effect July 1st
Jun 26, 2024 11:04:09 AM
The U.S. Department of Labor announced a final rule, raising the Fair Labor Standards Act’s minimum annual salary threshold for overtime pay eligibility in a two-step process.
Standard salary level:
Before July 1, 2024 $684 per week (equivalent to $35,568 per year)
July 1, 2024 $844 per week (equivalent to $43,888 per year)
January 1, 2025 $1,128 per week (equivalent to $58,656 per year)
To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684* per week (current standard salary level before July 1, 2024). Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level (not for highly compensated employees as defined).
In addition to increases to the standard salary level, the highly compensated employee (HCE) threshold increases from $107,432 to $132,964 per year on July 1st and $151,164 per year on January 1st. The HCE must receive at least the full standard salary level amount per week each pay period on a salary or fee basis without regard to the payment of nondiscretionary bonuses and incentive payments.
There are three lawsuits pending that are challenging the new rule. In addition to these lawsuits, Congress has passed Joint Resolutions in both the House and Senate seeking to eliminate the 2024 regulations (it is expected that President Biden would not sign such a resolution).
Even so, as of this writing, the new rule has not been blocked and employers should comply beginning July 1, 2024.
Check out recent issues of FranklyHR for tips for employers and you can watch the video below for an overview.
