By Trüpp

The U.S. Department of Labor (DOL) has released a new overtime rule, expanding overtime protections for millions of lower-paid salaried workers by raising the minimum salary level, currently $35,568, with a two-phased approach. In addition to the raised salary level, the new rule includes automatic updates every three years.

Phase 1:
Effective July 1, 2024, the rule will increase the salary thresholds required to exempt certain salaried employees from federal overtime pay requirements based on the current methodology. Initially, the threshold will rise to an annual salary of $43,888, marking a 23% increase over the current level.

Phase 2:
Effective January 1, 2025, the rule will increase the salary threshold to $58,656. The second increase relies on a new methodology and marks a 64.9% increase over the current level.

This adjustment is part of the Biden-Harris administration’s commitment to ensuring workers are fairly compensated for their time, particularly addressing cases where salaried employees work long hours without additional pay.

“This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” said Acting Secretary Julie Su. “Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay. That is unacceptable. The Biden-Harris administration is following through on our promise to raise the bar for workers who help lay the foundation for our economic prosperity.”

Acting Secretary Julie Su emphasized the importance of this rule in honoring the principle that working more than 40 hours a week should result in extra compensation. The DOL engaged with various stakeholders before finalizing the rule, considering over 33,000 comments. The new rule aims to clarify who qualifies as exempt from overtime protections under the Fair Labor Standards Act (FLSA), providing clearer guidance for employers and economic security for workers.

Key provisions include expanding overtime protections, ensuring fair compensation for overtime work, and establishing regular updates to salary thresholds to prevent erosion of these protections over time.

Read the full DOL announcement

Concerned about FLSA compliance?