On April 23, 2024, the U.S. Department of Labor announced the finalized overtime rule extending overtime protections to millions of salaried workers. The final rule goes into effect on July 1, 2024.
The final rule will restore and extend the right to overtime pay to many salaried workers, including those who historically were entitled to overtime pay under the FLSA because of their lower pay or the type of work they performed. There is no change to the duties test.
Currently, salaried workers who earn less than $684/week ($35,568/year) are eligible for overtime. Beginning on July 1, salaried workers who earn less than $844 per week ($43,888/year) will become eligible for overtime pay. On January 1, 2025, the amount will increase and salaried workers who earn less than $1,128 per week ($58,656/year) will become eligible for overtime pay.
The final rule will also increase the total annual compensation requirement for highly compensated employees (who are not entitled to overtime pay under the FLSA if certain requirements are met) from $107,432 per year to $132,964 per year on July 1, 2024, and then to $151,164 per year on January 1, 2025.
Starting July 1, 2027, these thresholds will be updated every three years.