U.S. Department of Labor's New Overtime Rule
On April 23, 2022, the U.S. Department of Labor issued a final rule increasing the salary threshold for some exempt employees under the Fair Labor Standards Act (the “FLSA”).
The new rule will substantially increase the minimum salary that certain exempt employees must be paid to be exempt from the overtime pay requirements of the FLSA.
Currently, in addition to satisfying duties requirements, in order to qualify for the executive, administrative, and professional exemptions under the FLSA an employee must be compensated on a salary basis at a rate not less than $684 per week. This equates to $35,568 a year.
However, under the new rule, the salary threshold for the executive, administrative, and professional exemptions will increase as follows:
1. Beginning on July 1, 2024, the salary threshold will increase to $844 a week, which equates to $43,888 a year.
2. Beginning on January 1, 2025, the salary threshold will increase to $1,128 a week, which equates to $58,656 a year.
3. As of July 1, 2027, and every 3 years thereafter, the amount required to be paid to exempt employees on a salary basis will be updated based upon the current earnings data.
Given the significance of these changes to the overtime exemption rules, employers should act now to ensure compliance with the law.
For additional information please contact employment law attorney, Charles H. Henderson.
Disclaimer: Any opinions raised in this blog are solely those of the author. The information contained in this blog is general in nature and is not offered, and cannot be considered, as legal advice for any particular situation.