DOL Raises White Collar Overtime Threshold by 65%, Leaves Employers Little Time To Comply

April 25, 2024

 

What's New

The U.S. Department of Labor has issued a final rule revising the white-collar exemptions to the Fair Labor Standards Act’s overtime rules. The rule will increase the minimum amount that a salaried employee must be paid to be exempt from overtime pay—from the current $684 per week (equivalent to $35,568 per year) to $1,128 (equivalent to $58,656 per year). This 65% increase is even higher than the almost 55% increase that DOL proposed last September. The increase will occur in two phases, with the minimum salary level increasing to $844 per week on July 1, 2024, and to $1,128 on January 1, 2025. The revised regulations also increase the minimum salary for the highly compensated employees’ exemption and establish a mechanism for automatically updating the salary levels every three years.

What It Means

The new rule will make thousands of additional salaried executive, administrative, and professional employees eligible for overtime pay.
It seems likely that it will be challenged in court, but employers need to take steps to comply in case it takes effect as scheduled. Employers with salaried white-collar workers who are FLSA-exempt and earn less than the new salary levels will have to decide whether to increase their pay, reclassify them as nonexempt, or restructure their jobs.

What You Should Do

Register for a Members Only Web Workshop that CWC will hold May 7, 2024, to explain the rule.





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